Five Florida cities that may be future Detroits

For a larger view click on the map.

WDW- FL reported that one-third of Florida’s cities are in “perilous financial positions“. The reasons: the increasing burden of  growing retirement and medical costs for government retirees coupled with shrinking revenues.

Luke Rosiak from the Washington Examiner did an analysis to determine which US cities have a larger proportion of government workers to population than Detroit. Rosiak used the Census Bureau’s 2011 Annual Survey of Public Employment and Payroll to rank every U.S. city with a population of 200,000 or more.

Rosiak notes, “Remarkably, the Census Bureau excluded from these figures all teachers and education professionals, which make up the largest group of local government employees.”

Rosiak reports, “Detroit declared bankruptcy due in no small part to $3 billion in unfunded public employee pensions owed a sprawling city workforce that kept growing even as the city’s population shriveled, but a Washington Examiner analysis found that 19 major American cities have even bigger ratios of such workers to residents.”

“What’s more, seven of the 19 cities with larger relative workforces than Detroit paid workers more than twice as much as the Motor City did its employees,” states Rosiak.

To view the map with all of the city data click here.

Below are those Florida cities listed by Rosiak (Note: some city government agencies and public school teachers/education professionals are not counted):

TAMPA

Residents per employee   79
Population: 335,709
Employees: 4,244
Annual payroll: $540,168,672
Average compensation: $127,278
 

ST PETERSBURG

Residents per employee   83
Population: 244,769
Employees: 2,943
Annual payroll: $170,042,328
Average compensation: $57,778
 
 

ORLANDO

Residents per employee   85
Population: 238,300
Employees: 2,799
Annual payroll: $338,968,872
Average compensation: $121,103
 
 

JACKSONVILLE

Residents per employee   87
Population: 821,784
Employees: 9,368
Annual payroll: $1,037,019,744
Average compensation: $110,698
 

MIAMI

Residents per employee   101
Population: 399,457
Employees: 3,923
Annual payroll: $479,194,080
Average compensation: $122,149
 
 

RELATED COLUMNS:

New Poll: Detroit Bankruptcy Popular in Michigan

A whole bunch of really depressing facts about Detroit

How do Americans with jobs get to work?

I have reported on the growing costs of running publicly funded transportation systems (buses, light rail, AMTRAK). Public bus systems rarely pay for themselves. Rather they are heavily subsidized by federal, state and local governments. For example, in Sarasota County, FL government runs two bus services and both are monopolies. SCAT is run by the County and the other run by Sarasota County School Board. Both are paid for by county property taxpayers.

NPR’s Shiva Koohi portrays in two simple charts how Americans who have jobs get to work.

Since 1960 American workers get to work primarily, and in ever increasing numbers, via private transportation. Use of public transportation has declined by over half since 1960, while use of private transportation has increased by 20% (see below charts). The use of bikes, taxis and walking by workers have all declined since 1960 and 1980. The number of those working at home has doubled since 1980 but remains a small number of total workers. Telecommuting has not yet caught on.

Click on the chart for a larger view.

Koohi reports, “More than ever, Americans are getting to work by driving alone. As the graph above shows, the share of Americans driving to work rose sharply in the second half of the 20th century, as the nation became more suburban. The rate has been flat for the past few decades — but during that time the percentage of people who carpool fell (even as carpool lanes proliferated).”

Koohi notes:

Today, only 5 percent of workers take public transportation, down from 11 percent in 1960; only 4 percent walk to work, down from 7 percent in 1960.

One surprising detail in the numbers: The share of workers who work at home is actually lower today than it was 50 years ago (4 percent today versus 7 percent in 1960). A 1998 Census report pointed to “the steep decline in the number of family farmers and the growing tendency of professionals, such as doctors and lawyers, to leave their home and join group practices resulted in a loss each decade of the number of at-home workers.” The share of people working at home has been rising for the past few decades, as telecommuting has become more popular, but the rise hasn’t been nearly enough to make up for the earlier decline.

In October, 2009 Catherine Rampell posted the below map on Economix. It shows the percentages of workers who drove to work alone by state and is based on U.S. Census data.

 

Richard Florida noted patterns in Rampell’s map. Florida reported:

Income and Economic Output: The richer the state, the less likely people were to drive alone. Driving alone was negatively correlated with state income levels (-.46) and output per capita (-.41).

Class and Human Capital
: States with higher percentages of college graduates (-.47) and the creative class (-.43) were less likely to have people driving alone. Driving alone was much more likely in states with large working class concentrations (.62).

Professional and Creative Jobs:
 Driving alone was less likely in states with high concentrations of virtually every type of professional, knowledge-based and creative jobs. But it was least likely in states with large concentrations of artists, designers, and entertainers (-.63), architects and engineers (-.61), scientists (-.56 ), and lawyers (-.55).

Are US banks enabling manipulation on a vast scale?

Geo Intelligence states, “Top economists, financial experts and bankers say that the big banks are too large … and their very size is threatening the [US] economy.”

On June 27, 2013 Representatives Alan Grayson (D-FL), Raul Grijalva (D-AZ), John Conyers (D-MI) and Keith Ellison (D-MN) sent a letter to Federal Reserve Chairman Ben Bernanke. The letter states, “We write in regards to the expansion of large banks into what had traditionally been non-financial commercial spheres. Specifically, we are concerned about how large banks have recently expanded their businesses into such fields as electric power production, oil refining and distribution, owning and operating of public assets such as ports and airports, and even uranium mining. [Isn’t that a national security issue?]”

Grayson, et. al. note, “Here are a few examples. Morgan Stanley imported 4 million barrels of oil and petroleum products into the United States in June, 2012. Goldman Sachs stores aluminum in vast warehouses in Detroit as well as serving as a commodities derivatives dealer. This ‘bank’ is also expanding into the ownership and operation of airports, toll roads, and ports. JP Morgan markets electricity in California.”

Grayson, et. al write, “According to legal scholar Saule Omarova, over the past five years, there has been a ‘quiet transformation of U.S. financial holding companies.’ These financial services companies have become global merchants that seek to extract rent from any commercial or financial business activity within their reach.  They have used legal authority in Graham-Leach-Bliley to subvert the ‘foundational principle of separation of banking from commerce’. This shift has many consequences for our economy, and for bank regulators. We wonder how the Federal Reserve is responding to this shift.” Read more.

ProPublica is tracking where taxpayer money has gone in the ongoing bailout of the financial system. The ProPublica database accounts for both the broader $700 billion stimulus bill and the separate bailout of Fannie Mae and Freddie Mac. According to their data: 927 banks received  $606B of which $366B has been returned. The banks revenues are $116B showing a total net to date of a minus $124B.

Following is the ProPublica list of Florida banks/mortgage servicers that were bailed out (those in RED failed to repay the government and resulted in a loss):

1st United Bancorp  
Alarion Financial Services  
Allstate Mortgage Loans & Investments, Inc.  
Bank United  
Bayview Loan Servicing, LLC  
Biscayne Bancshares, Inc.  
Capital International Financial, Inc.  
CenterState Banks of Florida, Inc.  
Central Florida Educators Federal Credit Union  
Coastal Banking Company  
Community Bancshares Of Mississippi, Inc. (Community Holding Company Of Florida, Inc.)  
Community Credit Union of Florida  
First Community Bank Corp of America  
First Federal Bank of Florida  
First Southern Bancorp  
Florida Bank Group, Inc.  
Florida Business BancGroup  
Florida Housing Finance Corporation  
FPB Bancorp  
GulfSouth Private Bank  
Gulfstream Bancshares  
Highlands Independent Bancshares  
Iberiabank  
IBM Southeast Employees’ Federal Credit Union  
Marine Bank & Trust Company  
Naples Bancorp  
Ocwen Financial Corporation, Inc.  
Pinnacle Bank Holding Company  
Premier Bank Holding Company  
Q Lending, Inc.  
Quantum Servicing Corporation  
Regent Bancorp  
Seacoast Banking Corp  
Seaside National Bank & Trust  
TIB Financial Corp  
U.S. Century Bank

 

For the full list of banking institution in the United States that received taxpayer bailouts click here.

Report: Florida gets 36.9% of its revenue from federal government

The Tax Foundation has released a map showing the dependency of each state on federal aid. Florida  relies heavily on federal assistance with 36.9% of its revenue derived from the federal government. Florida ranks 23rd of all states taking federal money.

Has Florida become a “welfare state”?

Mississippi takes in more than any other state, with 49% of its total general revenue coming from federal aid. Close behind are Louisiana at 46.5% and Arizona at 45.7%. On the other end of the spectrum, Alaska relies on federal aid for only 24% of its general revenue, followed closely by Delaware at 25.9% and North Dakota at 26%.

No state receives less than 24% of federal aid.

Question: Are the states truly sovereign when they receive so much aid from Washington, D.C.?

Federal-aid-as-a-percentage-of-state-general-revenue-(large)_0

Click on the image for a larger view.

Map courtesy of the Tax Foundation.

Report: Florida ethanol plant a bust – zero gallons of biofuel produced

The Institute for Energy Research (IER) did a review of the Environmental Protection Agencies’ (EPA) biofuel mandate. According to IER, “The Energy Policy Act of 2005 requires the Environmental Protection Agency (EPA) to set mandatory levels of cellulosic biofuel for refiners to blend into transportation fuels.  In order to restrain EPA, the law requires that the mandate be based on an estimate from the Energy Information Administration (EIA) as to how much cellulosic biofuel would be produced in the given year.”

One of the companies formed to meet the need for biofuels is INEOS Bio. INEOS Bio USA, LLC is located at 925 74th Avenue Southwest, Vero Beach, Florida. INEOS Bio’s parent company is the INEOS Group.

INEOS Group was founded by James Arthur “Jim” Ratcliffe, a chemical engineer turned financier and industrialist. According to the 2010 Sunday Times Rich List, Ratcliffe is one of the richest people in the United Kingdom. INEOS Group is the fifth largest chemical company in the world measured by revenues. In April 2010, Ratcliffe relocated the INEOS Group to Lausanne, Switzerland from the UK to cut the tax bill and save the company £100m a year.

The INEOS Bio website states:

The Center is the first large-scale project in the United States to receive registrations from the EPA for a facility using non-food vegetative waste materials (vegetative and yard waste) to produce cellulosic ethanol. Construction on the Center was completed in June 2012, and production of advanced cellulosic bioethanol is scheduled to begin in the 4th Quarter. INEOS Bio has plans to run municipal solid waste at the Center after the initial start-up.

The BioEnergy Center created more than 400 direct jobs in construction, engineering and manufacturing during its development and injected more than $25 million dollars directly into the Florida economy. The Center has 60 full-time employees and provides $4 million annually in payroll to the local community. The project sourced over 90 percent of the equipment from U.S. manufacturers creating or retaining jobs in more than 10 states.

According to IER:

In November 2011, Ethanol Producer Magazine conducted an interview with INEOS Bio CEO Peter Williams.  The article stated:

The project is on schedule and on budget so far, and if things continue to go as planned, the plant will be mechanically complete in April and will be continuously churning out waste-based ethanol by the second half of next year [2012].

The facilities were not completed by April.  INEOS Bio did not issue a news release on the project until July 23rd, stating:

Construction of Ineos’ $130 million biorefinery joint venture project in the US has been completed, with production expected to begin in the second half of 2012, said Peter Williams, CEO of Ineos Bio, the Switzerland-based company’s bioenergy business.

INEOS Bio did not produce any cellulosic ethanol in the second half of 2012.  In a subsequent news release on August 9, 2012, the company stated:

The Center is scheduled to begin production in the 3rd Quarter of this year.

In an October 31, 2012 news release, INEOS Bio stated:

Construction on the Center was completed in June 2012, and production of advanced cellulosic bioethanol is scheduled to begin in the 4th Quarter.

As EPA is aware, INEOS Bio produced 0 gallons of cellulosic biofuel from it[s] Florida plant in 2012.  As of the date of this comment, the company still has not produced any cellulosic biofuel in 2013.

Smart Brief reported, “Ineos Bio has joined Algenol in asking Florida Gov. Rick Scott to reject a bill [HB 4001] that would do away with the state’s ethanol requirement. Signing the bill into law “would send a clear signal to companies like ours and other investors that Florida is unfriendly to advanced biofuels, investing in new technology and jobs it creates or to building a clean energy economy,” Ineos CEO Peter Williams wrote in an e-mail. The bill “is an all-out attack on ethanol,” said Algenol CEO Paul Woods, adding, “I would rather go to a state that welcomes the jobs and the opportunity.”

HB 4001 reads:

An act relating to the Florida Renewable Fuel Standard 2 Act; repealing ss. 526.201-526.207, F.S., the Florida Renewable Fuel Standard Act, to remove the requirement that all gasoline offered for sale in this state include a percentage of ethanol, subject to specified exemptions, waivers, suspensions, extensions, enforcement, and reporting; amending s. 206.43, F.S.; conforming a cross-reference; providing an effective date.

Governor Scott signed HB 4001 on May 31, 2013. HB 4001 takes effect July 1st, 2013.

“Fascism” is the best way to implement Seven50: SE Florida Prosperity Plan

June 19-21, 2013 there will be dueling Seven50 Summits at the Palm Beach Conference Center, West Palm Beach, Florida.

The Seven50 plan is an effort by the Southeast Florida Regional Partnership, funded by a grant from the US Department of Housing and Urban Development (HUD), with the mission to,”[C]reate and implement the Seven50: SE Florida Prosperity Plan, a blueprint  for a vibrant and resilient economy; socially inclusive, sustainable, and affordable communities; and environmental sustainability.” View the SEFRP agenda here.

Mayor Craig Fletcher, City of Vero Beach, FL.

The City of Vero Beach, FL has pulled out of the plan.

Mayor Craig Fletcher attended a briefing given by proponents of Seven50 and reported that: city and county government would be less important, only “mega regions” are important as in the EU, the seven Florida counties that are part of the partnership “would have someone to control them”, they (the EU) are not going to put up with the American education system and “Fascism is the best form of government to implement these changes”.

Video remarks of Craig Fletcher, Mayor of the City of Vero Beach, FL at a City council meeting:

Proponents represented by the SE FL Regional Partnership (SEFRP) and opponents by The Liberty Caucus will be holding their respective summit in adjoining conference rooms at the Palm Beach Conference Center.

Why Seven50 now?

According to the SEFRP website, “The shifting nature of the global economy is changing the way business is done. Regions that can’t recognize and adapt to these changes will cease to be economically competitive. It’s time for Southeast Florida to move to the next level, to develop a regional mindset that focuses more on how to maximize the commonalities than accentuate the differences.” The agenda for the Seven50 Summit may be viewed here.

Opponents see this regionalization as an attack on local control, liberty and freedom.

The Liberty Caucus is a government watchdog organization that tracks local government in Fort Pierce, Port Saint Lucie and Saint Lucie County to “promote free markets and limit government intervention”.  St. Lucie County is one of the Seven50 partners.

Why stop Seven50?

According to the Liberty Caucus website, “The core of “sustainable development” is the notion of disciplining the consumption of consumers and producers. It consists of a self-appointed elite forcing needs and abilities of people against their will. But, needs and abilities cannot be determined arbitrarily by others; rather, it is derived by each individual according to their own unique, subjective valuation system. A central authority trying to determine the subjective valuation of other individuals consists of misallocation of resources (the same one’s we’re told to conserve) and market distortions (below market interest rates, industry specific stimulus) that inflate price bubbles (housing, commodity, stocks) causing an erosion of wealth.” The agenda for the anti-Seven50 Summit may be viewed here.

The Liberty Caucus notes:

Sustainability advocates tell us that:

  1. Resources are limited
  2. We are too inefficient for our own good
  3. Un-elected governing authority needs to decide what is the best allocation of our land, property and resources for us
  4. And thus lead everyone to prosperity with their ideas of sustainable development

Still unmentioned today, 26 years later, is:

  1. Who decides what is and is not sustainable
  2. On what logical basis sustainability is calculated
  3. Exactly whose ‘good’ is considered for benefit

Seven50 Consultant Andres Duany, from Duany Plater-Zyberk & Company, speaks about the “hope for fascism in South Florida” and how Seven50 can take local communities and “tie them into nothing”:

Duany has been a consultant to counties and cities across the state of Florida on “sustainability and sustainable communities”.

Obamacare’s Negative Impact on Florida’s Seniors

Column courtesy of the Heritage Foundation.

The Medicare program that provides health insurance to seniors faces a dire financial future. And Obamacare is making it worse.

Medicare’s Part A trust fund is projected to be insolvent by 2026 and the total program has a long-term unfunded obligation of more than $35 trillion. This means the government has made $35 trillion worth of benefit promises to current and future seniors that are not yet paid for — a staggering amount that is more than double the nation’s total current debt.

Despite the fact that the Medicare trustees have been warning of this financing disaster for many years, President Obama’s massive health care law makes the matter much worse, not better.

VIDEO: Ann Lorenz, who has Parkinson’s disease, worries about Medicare’s future:

Ignore the political rhetoric of keeping Medicare “as we know it.” Obamacare has already made significant changes to Medicare, namely through provider reimbursement reductions and the creation of an unelected board of bureaucrats, the Independent Payment Advisory Board (IPAB).

Here are three examples of Obamacare’s impact:

1) Huge payment reductions that reduce access to care. According to the Congressional Budget Office (CBO), Obamacare will reduce Medicare reimbursements by $716 billion over 10 years. These cuts will hit Part A providers such as hospitals, nursing homes, skilled nursing facilities, and hospices, along with Medicare Advantage plans. The trustees predict that if Congress allows these cuts to go into effect, 15 percent of Medicare providers would go in the red by 2019, 25 percent by 2030, and 40 percent by 2050.

This will absolutely impact seniors’ ability to access medical care. As the trustees explain: “Providers could not sustain continuing negative margins and would have to withdraw from serving Medicare beneficiaries or (if total facility margins remained positive) shift substantial portions of Medicare costs to their non-Medicare, non-Medicaid payers.” (Emphasis added.)

2) Medicare “savings” are spent on other parts of Obamacare. Obamacare’s Medicare “savings” and increased Medicare payroll tax are often touted as increasing the solvency of the Part A trust fund, but that simply is not true. The money is counted as paying for new entitlement spending in Obamacare.

As CBO plainly states, “CBO has been asked whether the reductions in projected Part A outlays and increases in projected [hospital insurance] revenues under the legislation can provide additional resources to pay future Medicare benefits while simultaneously providing resources to pay for new programs outside of Medicare. Our answer is basically no.”

3) The ominous and looming power of IPAB. The board will consist of 15 unelected and unaccountable bureaucrats, charged with meeting a newly created budget target in Medicare. When Medicare spending surpasses the target, IPAB will have to make recommendations to lower Medicare spending. The trustees project the much-hated IPAB will need to step up and make recommendations for the first time in 2016.

Obama’s Medicare agenda falls far short of what is necessary to put the program on a sustainable path, and his law’s negative impact on seniors is yet another reason the law must be repealed in its entirety before its most egregious provisions (Medicaid expansion and exchange subsidies) begin in 2014.

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How did we become addicted to big government?

The growing national scandal surrounding the IRS targeting individuals and organizations with a certain political stand is endemic of big government. This large bureaucracy is fulfilling its role as the keeper of the big government keys. But how did America get to this point of a huge and intrusive government?

Social Security is perhaps the best example of  how Americans become addicted to big government, especially tax giveaways and the enshrined systems that sustain them. America’s addiction to government control over its citizens has increased to the point that today many are dependent on federal handouts to maintain their health, happiness and well being.

Karl Marx said, “Religion is the opiate of the people.”

Today, “Big government is the opiate of the people.”

Let’s review a brief historical perspective on how America got here and then open up the much needed national discussion on the need for big government. 

We the people began to embrace big government 104 years ago with the founding of the Intercollegiate Socialist Society (ISS) in New York City on September 12, 1905 in Peck’s Restaurant. An organizational meeting was held and Jack London was elected President with Upton Sinclair as First Vice President. The ISS was established to, “throw light [in America] on the world-wide movement of industrial democracy known as socialism.” Their motto was “production for use, not for profit.”

Production for use, not for profit is the prime goal of big government.

So how could socialists begin selling big government and its redistribution of wealth ideology? First they had to gain unfettered control of production. On February 3, 1913 Congress passed and the states ratified the Sixteenth Amendment to our Constitution. Congress grabbed control of production via the federal income tax. America taxed its productivity by tapping every American’s wages. With the millions, then billions, and now trillions of dollars that Congress collected, they could entice or even force the strongest American to take the big government drug.

Then on April 8, 1913 Congress passed and the states ratified the Seventeenth Amendment to the Constitution which transferred U.S. Senator Selection from each state’s legislature to popular election by the people of each state. These two events made it much easier to collect and distribute big government as now Senators were no longer loyal to their state legislatures or primarily concerned with state sovereignty. Now U.S. Senators, along with U.S. Representatives, saw the value of spreading  the big government drug amongst the people in return for votes.

During the Great Depression Congress created the first “opiate for the masses” and named it Social Security. It was to be a social insurance program run by government, in other words guaranteed government largesse for life. The Social Security Act was signed into law in 1935 by President Franklin Roosevelt. He and Congress said this new drug would keep those unemployed, retirees and the poor financially secure. He called it the New Deal. All we needed to do was just pay in and all would be well.

In 1937 the United States Supreme Court in U.S. vs. Butler validated the Social Security Act and stated that, “Congress could, in its future discretion, spend that money [collected from the income tax] for whatever Congress then judged to be the general welfare of the country. The Court held that Congress has no constitutional power to earmark or segregate certain kinds of tax proceeds for certain purposes, whether the purposes be farm-price supports, foreign aid or social security payments.” All taxes went into the general fund.

Testifying before the Ways and Means Committee of the House of Representatives in 1952, the chief actuary of the Social Security Administration said—“The present trust fund is not quite large enough to pay off the benefits of existing beneficiaries”—those already on the receiving end, in other words. In 1955 chief actuary believed that it would take $35 billion just to pay the people “now receiving benefits”.

In 1935 under the Social Security program the Congress included the Aid to Families with Dependent Children Act (AFDC). During the late 1950s many states realized that this act, while created to help widows with children, was being used to subsidize women having children with men they were not married to. Louisiana alone took 23,000 women off the AFDC act rolls based upon their immoral behavior.

Arthur S. Flemming, Department of Health and Human Services under President Dwight David Eisenhower

In 1960 Arthur S. Flemming, then head of the Department of Health and Human Services under President Dwight David Eisenhower and a key architect of Social Security, issued an administrative ruling that states could not deny eligibility for income assistance through the AFDC act on the grounds that a home was “unsuitable” because the woman’s children were illegitimate. In 1968, the United States Supreme Court’s “Man-in-the-House” rule struck down the practice of states declaring a home unsuitable (i.e., an immoral environment) if there was a man in the house not married to the mother. Thus, out-of-wedlock births and cohabitation were legitimized. In very short order, the number of women on welfare tripled and child poverty climbed dramatically. The assault on the family was on and Congress and the Supreme Court were co-pushers of this new government largesse drug called AFDC.

In effect big federal government became the pimp, the homes of single mothers became the brothels and the fathers became the Johns. The children begotten by these women became the next generation of big government addicts. Just as a baby born to a mother doing crack is addicted to cocaine, so too are these children born with a lifetime addiction to the onerous and destructive drug – big government.

Then Congress added a new ingredient to the powerful Social Security drug called Medicare on July 30, 1965.

Congress created Medicare as a single-payer health care system. Medicare was for those over 65 years old and was signed into law by President Lyndon B. Johnson. President Johnson called it part of his Great Society program. Congress immediately got more addicts to begin taking this drug. At the same time Congress added a second even more powerful ingredient to this drug called Medicaid. This new ingredient brought into being an entirely new distribution system – all of the states of the union. Even though this new program violates state sovereignty it was passed anyway, in no small part because Senators were no longer accountable to the State Legislatures but rather committed to pushing government largesse.

The states were now helping pay for and distribute this powerful and expensive big government designer drug. The drug was offered to low-income parents, children, seniors, and people with disabilities. Congress now had more people on the Social Security drug than ever before. Congress had turned a corner – addiction to government largesse was now imbedded in our society. But Congress was not finished for it kept looking for more clients until we now know that the estimated unfunded liabilities for these four drugs are:

• Social Security – $10.7 trillion

• Medicare Parts A and B – $68 trillion

• Medicare Part D – $17.2 trillion (created in just 3 years)

America’s addiction to big government will cost our children and grandchildren an estimated $95.9 trillion dollars. The gross domestic product of the entire world in 2007 was $61 trillion. Big government is the true opiate of the people. The following is a quote from a May 26, 1955 Herald-Tribune News Service article:

“Seven Amish bishops appealed to Congress today to exempt members of their church from receiving any benefits of the Social Security program. They are willing to continue paying Social Security taxes, however . . . . The bishops made it clear that no elder of the church would think, today, of applying for Social Security or any other government benefits. They want the law changed, they said, to ‘remove temptation’ from their children and grandchildren.”

The IRS scandal may be the straw that breaks the back of big government. It may even bring down the Sixteenth Amendment?

Rep. Tom Rooney (FL-17) co-sponsors HR-25, the Fair Tax Act

Representative Tom Rooney (R – FL District 17)

Representative Tom Rooney (R – FL District 17) has now become the eleventh member of the Florida delegation to co-sponsor the Fair Tax Act (HR-25/S-13). Rep. Rooney represents South Central Florida including most of Hardee, Desoto, Highlands, Okeechobee and St. Lucie Counties. He sits is on the House Appropriations committee. A full list of House sponsors may be viewed by clicking here. Senator Saxby Chambliss (R-GA) is the sponsor of S-13 in the US Senate. Senate sponsors may be viewed here.

The IRS scandal has renewed interest in HR-25.

The Fair Tax Act is introduced, “To promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States.” The Fair Tax Act states:

SEC. 2. CONGRESSIONAL FINDINGS.

2 (a) FINDINGS RELATING TO FEDERAL INCOME

3 TAX.—Congress finds the Federal income tax—

(1) retards economic growth and has reduced the standard of living of the American public;
(2) impedes the international competitiveness of 7 United States industry;
(3) reduces savings and investment in the United States by taxing income multiple times;
(4) slows the capital formation necessary for real wages to steadily increase;
(5) lowers productivity;
(6) imposes unacceptable and unnecessary administrative and compliance costs on individual and business taxpayers;
(7) is unfair and inequitable;
(8) unnecessarily intrudes upon the privacy and civil rights of United States citizens;
(9) hides the true cost of government by embedding taxes in the costs of everything Americans buy;
(10) is not being complied with at satisfactory levels and therefore raises the tax burden on law abiding citizens; and
(11) impedes upward social mobility.

Members of both major political parties have stated that the IRS is a threat to freedom, fairness and economic opportunity. However, none have suggested the elimination of the 90,000 employee strong IRS. Many have voiced concerned that the IRS will expand its powers by being a key part of the implementation of the Affordable Healthcare Act, which is a national tax according to a recent US Supreme Court decision.

Rep. Vern Buchanan (FL-District 13) addresses the Congressional investigation:

Rep. Buchanan sits on the House Ways and Means Committee. He has not signed on as a co-sponsor of HR-25.

Disclaimer: The author sits on the Board of Directors of Fair Tax – Florida.

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Surprise! Obamacare Creating Some Jobs

Sean Hackbarth from FreeEnterprise.com states, “I don’t think this was what the public had in mind when the President and supporters sold them Obamacare as a job-creator.”

The federal health law derided as a “job-killer” by critics will create an estimated 9,000 jobs in 14 states this summer to handle consumer inquiries about new online insurance marketplaces.

The jobs are through Vangent, a General Dynamics subsidiary, which was awarded a $530 million one-year contract by the federal government to set up call centers to answer inquiries (sic) related to the insurance marketplaces in 34 states where they will be run in whole or part by the federal government. Other states will run their own marketplaces with their own call centers.

“And these few thousand government-created, taxpayer-funded jobs don’t make up for the workers at the Circle K Southeast convenience store chain who will be pushed into part-time work because of the health care law. [via Free Beacon] Nor does it make up for those workers in local governmenthigher educationrestaurants, a movie theater chain, and in other firms who will also see their hours pared back,” notes Hackbarth.

Read the full column here.

 

Rubio: Internet Sales Tax is a money grab by tax-hungry states

Washington, D.C. – U.S. Senator Marco Rubio (R-FL) issued the following statement regarding this evening’s vote on the so-called Marketplace Fairness Act, which would force businesses that sell products and services online to collect sales taxes from consumers in other states where these businesses have no physical representation:

“The Internet sales tax is a terrible idea that will crush small businesses with the new burden of having to collect taxes from their out-of-state consumers. The Internet sales tax is nothing more than a money grab by tax-hungry state and local governments that are desperate for more revenue because they refuse to cut spending.

“As far as job-killing taxes go, the Internet sales tax is the worst kind because, rather than only take the hard-earned money of small businesses, it imposes more complications and burdens for businesses to comply with.

“To illustrate how bad an idea this Internet sales tax is, if it ever becomes law, it will force businesses in Florida to collect sales taxes imposed by over 9,000 jurisdictions throughout the U.S. That means companies will be forced to spend more time and money figuring all of this out and making sure they send the right amount to each state and municipality where their consumers reside. The more companies are burdened with new mandates like this, the less time and money they have to grow their businesses and create new jobs.”

Florida’s Internet sales tax

According to NOLO, the online legal encyclopedia, “The Internet takes tax-free shopping to a new level. In fact, no-tax shopping has become a prime lure of online retailers looking to hook consumers on click-and-charge buying. Despite what you sometimes hear, however, some Internet sales are subject to sales tax, and even when a site doesn’t collect sales tax, consumers are technically responsible for remitting any unpaid sales tax on online purchases directly to their state.”

For information on the Internet sales tax laws for each state, see NOLO’s Internet Sales Tax: A 50-State Guide to State Laws.

NOLO states, “The current default rule throughout the United States is that you must collect sales tax on Internet sales to customers in those states where your business has a “physical presence.” The physical-presence rule is based on a 1992 United States Supreme Court decisionQuill Corp. v. North Dakota, that addressed the obligations of mail-order businesses to collect sales tax on out-of-state sales. The decision has been extended to include online retailers.”

NOLO reports in its column “Florida Internet Sales Tax“, “A more specific statement of what counts as physical presence under Florida law can be found among the various definitions of “dealer” (meaning a person or entity required to pay sales tax) in Section 212.06 of Florida’s sales and use tax law. More particularly, a ‘dealer’ under this law includes ‘any person . . . who maintains or has within [Florida], directly or by a subsidiary, an office, distributing house, salesroom, or house, warehouse, or other place of business’.”

Senator Nancy Detert, R-FL District 28.

Senator Nancy Detert, Florida District 28, introduced SB 0316: Taxes. SB 0316 states:

Taxes; Reducing the tax rate applied to the sale of communications services; reducing the tax rate applied to retail sales of direct-to-home satellite services; revising the term “mail order sale” to specifically include sales of tangible personal property ordered through the Internet; providing that certain persons who make mail order sales and who have a nexus with this state are subject to this state’s power to levy and collect the sales and use tax when they engage in certain enumerated activities, etc.

NOLO notes that in 2012:

“The Florida legislature recently considered amending the state’s legal definition of a mail-order sale so that Internet “dealers” who do not have a physical presence in the state would nonetheless have to pay Florida sales tax. Laws of this sort have been considered in various forms in various states. They are sometimes referred to as “Amazon laws.”

[ … ]

More particularly, earlier this year the Florida legislature considered amending the state’s sales and use tax law to require out-of-state “dealers” without a physical presence in Florida, but with so-called “click-through” arrangements with persons in Florida, to nonetheless collect sales tax. Such a dealer would need to collect sales tax from Florida customers if that dealer:

  • had an agreement with one or more Florida residents to direct potential buyers to the dealer via a website link
  • compensated the Florida residents for directing potential buyers to the online dealer, and
  • the dealer’s “cumulative gross receipts” from such directed sales to Florida customers exceeded $10,000 within the preceding 12 months

However, the proposed legislation was never enacted. It remains unclear whether similar legislation will be re-introduced in the future.

We know that Senator Detert did introduce this legislation during the 2013 session.

Final Words from NOLO:

The issue of whether to require online retailers to collect sales tax in a state where they have no physical presence has been a matter of ongoing debate. At this time, however, Florida has not enacted any law that would require such retailers to collect sales tax from Florida customers.

In Florida, the physical-presence rule continues to apply for Internet retailers. However, because the issue remains contentious, you should consider checking in periodically with the Florida Department of Revenue to see if the rules have changed. Also, for more general information on taxes on Internet sales, see Nolo’s article Sales Tax on the Internet.

AARP files brief in the Florida Supreme Court challenging the Florida Public Service Commission

Attorney Jack L. McRay – representing the AARP – has filed a brief with the Florida Supreme Court asking the Court to remand the recent decision by the Florida Public Service Commission (Commission) to approval a “secret” settlement agreement between Florida Power & Light (FPL) and three other parties related to FPL’s March 2012 petition filed with the Commission to raise electric rates for some 4.1 million customers.

McRay argues that AARP is a nonprofit organization with a membership that helps people 50+ years of age – have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. McRay argues that utility costs comprise a substantial portion of their housing expenses – that the burden can be severe – that even people who own their homes outright may pay over half their limited income for housing – due in large part to the high cost of utilities. Inability to pay utilities ranks as the second most common cause for eviction after inability to pay rent.

AARP is appealing to the Court to ensure that the Commission follows the law in setting residential utility rates that are fair, just, and reasonable. The Commission approved a non-unanimous settlement in the FPL case – contrary to Florida law – because it failed to make findings based upon competent, substantial evidence on the record as a whole to address the objections raised by OPC – representing the interests of residential ratepayers. Moreover, the Commission approval of the settlement includes new matters that should not be included in the rate case because no public notice of them was provided as required.

Check cashing anti-fraud bill passes Florida legislature

Representative W. Travis Cummings

Tallahassee, Fla. – The Florida Office of Financial Regulation (OFR) today commended the Florida Legislature for the passage of House Bill 217, which if signed into law, will require check cashiers to log check cashing data into a statewide database designed to prevent fraudulent activity.

“It has been a pleasure working with the various stakeholders on this very important legislation that is long overdue,” said Representative Travis Cummings, sponsor of the bill.  “I am convinced that the use of technology via this real time database will significantly combat fraud that is currently costing our state roughly $1 billion annually.”

The new legislation will require check cashiers to log any checks cashed in excess of $1,000.  In addition to the check amount, each business will be required to submit traceable information such as payer  payee, fee charged, type of identification presented and payee’s workers’ compensation insurance policy number, if the check was made out to a business.  The bill also provides that multiple checks accepted from any one person in one day, which total $1,000 or more, must be aggregated and reported in the database.

“This legislation allows our state agencies to work together to prevent and fight fraud,” said OFR Commissioner Drew J. Breakspear. “The new database will allow the OFR to efficiently and effectively track and investigate potential fraudulent activity with real time information from our partners at the Department of Financial Services (DFS) and the Department of State (DOS).”

This legislation is one of the recommendations from a work-group convened by Chief Financial Officer, Jeff Atwater, to look at the complicated and organized premium avoidance scheme that is pervading the workers’ compensation insurance market.  In some cases, check cashing store owners are being used to accomplish this fraud.

“This work-group brought together all stakeholders to develop recommendations on how to clean up the industry,” said CFO Atwater. “I applaud the Florida Legislature for passing this bill and look forward to working with the OFR to prevent and prosecute fraudulent activity.”

The check cashing database created by this legislation will have the capability to interface with the Secretary of State’s database for purposes of verifying corporate registration and articles of incorporation.  The database will also have the capability to interface with the DFS database for purposes of determining proof of coverage for workers’ compensation.

“Florida’s financial service centers have worked hard to help ensure passage of House Bill 217 to provide regulators with a real-time database of check cashing transactions,” said Corey Mathews, Executive Director of the Financial Service Centers of Florida.  “This critical tool will help law enforcement to identify and prosecute criminals who are attempting to invade the financial services industry.”

“Workers’ Compensation fraud is a problem that negatively affects consumers and taxpayers every day,” said James Banks, Executive Secretary Treasurer of the Florida Carpenters Regional Council.  “Florida’s Carpenters applaud the steps the Legislature has taken to level the playing field in the construction industry by creating additional tools for our law enforcement community.”

Judicial Watch Uncovers USDA Records Sponsoring U.S. Food Stamp Program for Illegal Aliens

(Washington, DC) – Judicial Watch today released documents detailing how the U.S. Department of Agriculture (USDA) is working with the Mexican government to promote participation by illegal aliens in the U.S. food stamp program.

The promotion of the food stamp program, now known as “SNAP” (Supplemental Nutrition Assistance Program), includes a Spanish-language flyer provided to the Mexican Embassy by the USDA with a statement advising Mexicans in the U.S. that they do not need to declare their immigration status in order to receive financial assistance.  Emphasized in bold and underlined, the statement reads, “You need not divulge information regarding your immigration status in seeking this benefit for your children.”

The documents came in response to a Freedom of Information Act (FOIA) request made to USDA on July 20, 2012.  The FOIA request sought: “Any and all records of communication relating to the Supplemental Nutrition Assistance Program (SNAP) to Mexican Americans, Mexican nationals, and migrant communities, including but not limited to, communications with the Mexican government.”

The documents obtained by Judicial Watch show that USDA officials are working closely with their counterparts at the Mexican Embassy to widely broaden the SNAP program in the Mexican immigrant community, with no effort to restrict aid to, identify, or apprehend illegal immigrants who may be on the food stamp rolls. In an email to Borjon Lopez-Coterilla and Jose Vincente of the Mexican Embassy, dated January 26, 2012, Yibo Wood of the USDA Food and Nutrition Service (FNS) sympathized with the plight of illegal aliens applying for food stamps, saying, “FNS understands that mixed status households may be particularly vulnerable.  Many of these households contain a non-citizen parent and a citizen child.”

The email from Wood to Lopez-Coterilla and Vincente came in response to a request from the Mexican Embassy that the USDA FNS step in to prevent the state of Kansas from changing its food stamp policy to restrict the amount of financial assistance provided to illegal aliens.  In a January 22, 2012, article, the Kansas City Star had revealed that the state would no longer include illegal aliens in its calculations of the amount of assistance to be provided low-income Hispanic families in order to prevent discrimination against legal recipients.

The documents, obtained by Judicial Watch in August 2012, include the following:

  • March 30, 2012 – The USDA seeks approval of the Mexican Embassy in drafting a letter addressed to consulates throughout the United States designed to encourage Mexican embassy staffers to enroll in a webinar learn how to promote increased enrollment among “the needy families that the consulates serve.”
  • August 1, 2011 – The USDA FNS initiates contact with the Mexican Embassy in New York to implement programs already underway in DC and Philadelphia for maximizing participation among Mexican citizens. The Mexican Embassy responds that the Consul General is eager to strengthen his ties to the USDA, with specific interest in promoting the food stamp program.
  • February 25, 2011 – The USDA and the Mexican Consulate exchange ideas about getting the First Ladies of Mexico and United States to visit a school for purposes of creating a photo opportunity that would promote free school lunches for low-income students in a predominantly Hispanic school. Though a notation in the margin of the email claims that the photo op never took place, UPI reported that it actually did.
  • March 3, 2010 – A flyer advertises a webinar to teach Hispanic-focused nonprofits how to get reimbursed by the USDA for serving free lunch over the summer. The course, funded by American taxpayers, is advertised as being “free for all participants.”
  • February 9 , 2010 – USDA informs the Mexican Embassy that, based on an agreement reached between the State Department and the Immigration & Naturalization Service (now ICE), the Women, Infants & Children (WIC) food voucher program does not violate immigration laws prohibiting immigrants from becoming a “public charge.”

As far back as 2006, in its Corruption Chronicles blog, Judicial Watch revealed that the USDA was spending taxpayer money to run Spanish-language television ads encouraging illegal immigrants to apply for government-financed food stamps. The Mexican Consul in Santa Ana, CA, at the time even starred in some of the U.S. Government-financed television commercials, which explained the program and provided a phone number to apply. In the widely viewed commercial the Consul assured that receiving food stamps “won’t affect your immigration status.”

In 2012, Judicial Watch reported that in a letter to USDA Secretary Tom Vilsack, Alabama Senator Jeff Sessions questioned the Obama administration’s partnership with Mexican consulates to encourage foreign nationals, migrant workers and non-citizen immigrants to apply for food stamps and other USDA administered welfare benefits. Sessions wrote, “It defies rational thinking,” Sessions wrote, “for the United States – now dangerously $16 trillion in debt – to partner with foreign governments to help us place more foreign nationals on American welfare and it is contrary to good immigration policy in the United States.”

“The revelation that the USDA is actively working with the Mexican government to promote food stamps for illegal aliens should have a direct impact on the fate of the immigration bill now being debated in Congress,” said Judicial Watch President Tom Fitton. “These disclosures further confirm the fact that the Obama administration cannot be trusted to protect our borders or enforce our immigration laws. And the coordination with a foreign government to attack the policies of an American state is contemptible.”

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