How Social Security Makes Us Poorer by Brenton Smith

When you read that Social Security lifts 50 percent of seniors out of poverty, keep in mind that it was largely the cost of Social Security that put them there. It’s the perfect example of government incompetence creating higher costs and misguided incentives—and delivering exactly the opposite of what it promised.

The contradiction stems from the cost of Social Security, which has exploded. In 1950 Social Security cost 2 percent of the first $3,000 of income (in 2013 dollars, that would be 2 percent of roughly $29,000, according to the BLS calculator).  In 2013, the retirement portion of Social Security cost 10.6 percent of the first $113,700. On top of this cost, the government now takes another 1.8 percent of your wages to cover the cost of disability benefits, which were added in 1958.

What’s more, you get a lot less bang for a lot more bucks. A couple retiring in 1960 expected to collect $8 of benefits for every $1 of contributions. Today the return for average Americans is actually negative.

The process of rising costs and declining returns has continued for 80 years. We are now at a point where the largest investment in retirement planning of the vast majority of Americans loses money. No one should be surprised to find that people who invest their retirement savings poorly wind up in poverty when they reach retirement.

The Urban Institute’s “Social Security and Medicare Taxes and Benefits over a Lifetime” projects what a hypothetical worker will contribute to Social Security versus what they expect to collect. The “lifetime value of taxes” shows what would have happened if the accumulated taxes had been put into an account that earned interest. The research projects that an average worker who retires in 2030 will have lost more than $400,000 in savings in order to collect about $370,000 in expected benefits.

Here is where the system gets really ugly. The $370,000 isn’t guaranteed. In fact, the Trustees project that in a good economy this worker will only get 77 percent of his scheduled benefits because he will retire after the trust fund is exhausted. Mind you, the 77 percent of scheduled benefits is completely dependent upon the willingness of future workers to commit 12.4 percent of their wages to this system as it falls into collapse. Basically this worker only collects provided another worker gets a worse deal.

The government has compounded the impact of the problem by feeding the systemic dysfunction directly through our labor market. Social Security is financed with a tax on labor—so it penalizes work even though the best cure for poverty is a job. This tax also creates a disincentive to hire people and creates an incentive to move work to countries with a lower tax burden. Social Security introduces incentives to work less, such as early retirement.

Nobody wants to be poor in their old age. If workers did not have to spend their entire careers burdened with Social Security taxes, fewer would face that possibility.


Brenton Smith is the founder of Fix Social Security Now.

Rick Santelli and 5th Anniversary of “The Birth of the TEA Party”

It was five years ago this week that CNBC Newsman Rick Santelli made his fiery speech from the floor of the Chicago Board of Trade that helped launch a movement:

“This is America!…President Obama, Are you listening?!…It’s time for another tea party.”

Joe Miller states, “The answer five years later to Santelli’s question is a resounding, ‘No.’ The President is not listening. It is clearly time to add some more tea bags to the pot and stoke up the fires.”




New PAC To Protect Tea Party Candidates Against GOP Establishment Attacks (+video)

Bachmann: ‘Lawless’ Obama ‘Rules by Tweet,’ Congress Must Have Support from Voters to Impeach Him

EDITORS NOTE: The featured image “T Party Flag” is courtesy of Tabnumlock. Tabnumlock does not in any way endorse this video or our use of this work. This image is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported

A Rogue IRS: Enough is Enough

 “On matters of style, swim with the current. On matters of principle stand like a rock.” – Thomas Jefferson

For over 10 years, the FairTax® campaign has warned about the politicization of the IRS. Events over the past nine months have only served to heighten this concern. Consider the following revelations:

  • The IRS admitted to and apologized for targeting certain conservative leaning groups.
  • The senior IRS official at the center of the targeting, Lois Lerner, pleaded the 5th during questioning by members of a House Oversight Committee.
  • The Chairman of the Ways and Means Committee released an email from another senior IRS official confirming the IRS had been “off-planning” this targeting as early as June 2012.
  • A senior Senator publicly requested the Executive Branch use the IRS and bypass Congress to weaken and curtail funding for certain conservative leaning 501(c)(4)’s.
  • The Chairman of Ways and Means stated the IRS has targeted established conservative 501(c)(4)’s for audits.
  • The IRS proposed new rules that would redefine political activities by 501(c)(4)’s and effectively extinguish their 1st Amendment right to free political speech. Thankfully, opposition has been swift and strong and is coming from the left and the right.

This cascading series of events should strike fear in the heart of every single American citizen.

Today, the IRS may target you for your political beliefs.Tomorrow it could be the color of your skin, your gender or your religious beliefs. Once you begin power sliding down the slippery slope, it’s impossible to predict where you might land.

There is a way out of this increasingly dangerous mess – a way in which citizens do not have to fear their elected officials or their government. It is the FairTax Plan.

The FairTax eliminates the income tax while defunding and disbanding the IRS. The FairTax institutes a progressive, national consumption tax that is simple, fair and ready to implement. It fully funds the federal government, including Social Security and Medicare, while stimulating the economy and generating desperately needed jobs at an unprecedented level!

The American Revolutionary War began because of colonists who were fed up with Britain’s increasing tyranny and taxation. Having had enough, they drew a line in the sand and declared  “no more taxation without representation”.

When a nation’s elected officials use government agencies for partisan political gain, suppress free political speech and target individual citizens for punitive action, that nation has effectively slid into taxation without representation.

Where is your line in the sand? When do you tell your elected representative, I’ve had enough, I want simple and transparent taxation without interference by special interests and a government that does not engage in punitive, partisan manipulation?

Finally, congratulations to Congressman Chris Stewart (UT-2) for becoming the 74th co-sponsor of HR 25! Please call Rep. Stewart and welcome him to the FairTax family.

EDITORS NOTE: The feature image is by Elvert Barnes from Hyattsville MD, USA. The photographer does not in any way endorse the author or the positions taken in this column. The image is licensed under the Creative Commons Attribution-Share Alike 2.0 Generic.

FL: Sarasota County School Board wants more money to pay teachers for doing less?


Sarasota County School Board members. Front row: Caroline Zucker, Shirley Brown. Back row: Dr. Carole Todd, Jane Goodwin and Frank Kovach. For a larger view click on the photo.

The School Board of Sarasota County is pushing for the extension of a 1 mill tax on all county property holders on March 25th. They are using school funds to lobby in favor of and promote the 1 mill tax. According to their official Report on the Uses of Referendum Funds since 2002, ”This vote allows the District to maintain existing programs, provide additional programs and continue the District’s commitment to quality education.”

In a previous column I questioned whether the School Board is really committed to a “quality education”. School Board Member Caroline Zucker responded to my column in an email stating, “There u go telling incorrect info.” I replied, “What is incorrect?”. To date Zucker has not answered my question.

Historically the revenue from the 1 mill tax goes directly into teacher’s salaries (see the District Report on the uses of referendum funds since 2002).This is why the School Board holds a special off cycle referendum at a cost to the School District of $.5 million. Doing so suppresses the vote.

However, teachers come out in droves to vote for their pay raise, and the union promotes the referendum via teachers and parents as a must have do-or-die effort to insure a “quality education.”

What the referendum does is make for a “quality union salary and benefit package” for teachers and administrators. For their $.5 million investment the School Board gets an ROI of an estimated $30+ million annually for four years. Not a bad deal but will it lead to a better education for Sarasota County public school children?

There are two issues. The first is that the School Board is all in with Common Core. This means that teachers have little or no control over what is taught, how it is taught, when it is taught and how it is tested. Parents are totally out of the picture. Common Core cuts out the ideal of local control of the education process, leading to a top down approach designed and implemented by the US Department of Education.

Terrence O. Moore, an assistant professor of history at Hillsdale College, states, “The Common Core Standards control the testing and curriculum of public schools and a large number of private schools in over forty states in the nation. Sold to the public as a needed reform, the Common Core nationalizes absurdity, superficiality, and political bias in the American classroom. As a result, the great stories of a great nation are at risk, along with the minds and souls of our children.”

So, teachers will be given what they must teach – in effect and in practice – Sarasota County teachers will be getting paid more, if the referendum passes, for doing much less due to Common Core.

The second issue is the children themselves. Which does research show truly enhances student achievement – teacher salaries or the child’s family?

Rod Thomson in an op-ed writes, “The debate over extending the extra tax for Sarasota County schools needs to be seen in light of the much larger debate over the future of our children and grandchildren and their opportunities for improved lives. In that context, the extra money taken by the school district is not just a waste of taxpayer money. It is a feel-good but ultimately empty distraction that allows us to vote for something without taking any action on the actual underlying, fundamental causes of poor student achievement and lack of upward mobility. But those root causes are hard to correct.”

“An extensive Harvard study was recently released titled ‘Where is the Land of Opportunity?‘ The four researchers concluded that the largest predictor of a child’s positive ability to move up in life is a family with both parents at home. For lack of upward mobility, they wrote, “the strongest and most robust predictor is the fraction of children with single parents. This study piles on top of a snow-capped mountain of data pointing to what all of us really know to be true — the metaphorical elephant in the living room. And spending more money on programs and salaries is simply irrelevant to the driving factor of family,” notes Thomson.

So why doesn’t the Sarasota County School Board recognize this disconnect between teacher salaries and student performance? Why they want to get reelected. Who gets out the vote for them? Why the teacher’s union of course. Are they buying votes? All we can say is that since the referendum was first introduced only one school board member wasn’t re elected – Caroline Zucker. But she ran again and was elected.

Three school board members are up for reelection in 2014. Perhaps that is why they are pushing the 1 mill referendum?

EDITORS NOTE: Stephanie Simon from Politico writes that with states such as Florida, Texas, and Washington state recently deciding not to require courses such as chemistry, physics, Algebra II or a foreign language for high school graduation, they are thumbing their noses at Obama’s call for a “rigorous college-prep curriculum” for all students, supposedly embodied in the Common Core State Standards.

Is Your State one of the Seventeen that Cut Taxes in 2013?

Ned Ryun, Founder & CEO American Majority writes, “A report released by our friends at the American Legislative Exchange Council Center for State Fiscal Reform reveals which states cut taxes in 2013 – whether through fundamental tax reform or slight modification of their tax codes.

Cutting taxes gives businesses the ability to hire more employees, creating much-needed jobs and lowering unemployment. The co-author of the report emphasizes the impact lower taxes can make on unemployment:

“In fact, from 2001 to 2011, the nine states with the highest personal income taxes have increased their total employment by only 4.9 percent. Over the same time period, the nine states with no personal income taxes saw their total employment grow by 12.7 percent, more than double.”

Eighteen* states cut taxes in the 2013 legislative year. Find out if yours is one of them.

UPDATE: The tax cut package from Oklahoma that is included in the 2013 Tax Cut Roundup was struck down by the Oklahoma State Supreme Court on Dec. 17, 2013, a month after the release of Tax Cut Roundup. This means only 17 states will see tax cuts as a result of the 2013 legislative session.

I’m happy to see that over one-third of states took successful steps toward implementing pro-growth reforms and cut taxes in 2013. It takes courage and commitment to see a proposed tax cut enacted into law.

Ryun asks, “I encourage you to get involved in your state for the chance to impact taxes and spending in 2014. One way to start is by educating yourself. Download American Majority’s free State Legislative Manual today!

*UPDATE: The tax cut package from Oklahoma that is included in the 2013 Tax Cut Roundup was struck down by the Oklahoma State Supreme Court on Dec. 17, 2013, a month after the release of Tax Cut Roundup. This means only 17 states will see tax cuts as a result of the 2013 legislative session.

EDITORS NOTE: The featured image (map) is courtesy of the American Legislative Exchange Council Center for State Fiscal Reform.

A Real Stunner: Obama IRS “not even a smidgen of corruption”!

 “Anything is better than lies and deceit!” – Leo Tolstoy

It’s been a rather stunning week.

It began with Denver fans sitting stunned as they watched the Seattle Seahawks totally decimate the Broncos in Super Bowl XLVIII.

Then, the President stunningly said the IRS targeting scandal had “not even a smidgen of corruption”. That was news to lots of Americans.

Sadly, the President said this in the face of what has already been presented from numerous Congressional investigations and hearings, and likely without having been briefed on an unfinished, albeit what appears to be a highly politicized Justice Department investigation.

Then three days after the interview, at Wednesday’s Congressional oversight hearing, Committee on Ways and Means Chairman Dave Camp presented a June 14, 2012,email between Ruth Madrigal, a career attorney at the U.S. Treasury Department and several top officials with the IRS in Washington.

In this rather stunning email, Madrigal wrote, “Don’t know who in your organizations is keeping tabs on c4s, but since we mentioned potentially addressing them (off – plan) in 2013, I’ve got my radar up and this seemed interesting…” Folks, in Washington speak, “off-plan” means hidden or secret from public view. So much for transparency.

This was followed by yesterday’s explosive IRS oversight hearing. Attorney Cleta Mitchell charged, “First, the IRS scandal is real. It’s not pretend, it’s real. Number two, the IRS scandal is not just a bone headed bunch of bureaucrats in some remote office contrary to what the President of the United States told the American people on Sunday. And, number 3, the IRS scandal is not over. It is continuing to this day. And, the Department of Justice Investigation is a sham. It is a NON-EXISTENT investigation.“

Mitchell then chronicled a series of what she described as “lies” during a stunning, opening statement.

The combative hearing culminated with several Members beating the drum for a Special Prosecutor. There’s only one word for this – stunning!

One wonders if the President now regrets making his “smidgen” declaration.

What has happened with the IRS scandals cannot be undone and deserves a full and unbiased, non-partisan investigation led by someone other than a major donor to the current President of the United States. And, today’s clarion call for a special prosecutor is a wise next step. Going forward, there is only one way to ensure that this kind of political terror never happens again.

HR 25, the FairTax Act of 2013, currently before Congress and the Committee on Ways and Means is the only legislation that provides simple and fair taxation for all Americans.

More importantly, HR 25 is the only legislation that defunds and disbands the IRS in its entirety.

It is time that Congress stop the perennial IRS theatrics – theatrics created by 74,608 pages of special interests driven tax code approved by Congress – and pass HR 25 / S 122.

Finally, Americans For Fair Taxation® is a key sponsor of the Western States Conservative Caucus in Phoenix, AZ onFebruary 22, 2014. Approximately 1,000 attendees will receive a FairTax lanyard, FairTax button, FairTax pocket card and FairTax briefing information in their registration packet. In addition, Neal Boortz will be a keynote speaker during the plenary session and will lead an exciting panel discussion, “The FairTax: An idea whose time has come,” which also features FairTax spokesperson Steve Hayes and retired AZ State Senator and longtime FairTax advocate Lori Klein.

Our AZ FairTax team, supported by grassroots FairTax leaders coming in from across the nation, will have a booth to share more information on the FairTax Plan with participants. This conference promises great educational opportunities for the FairTax. If you would like to join the FairTax team, you can register for the conference here.

I look forward to seeing you in Phoenix!

Rep. Bill Posey (R-FL) calls for IRS Special Prosecutor

“Please join me, Senator Ted Cruz and others in calling for the appointment of an independent special prosecutor to investigate the IRS’s illegal targeting of conservative groups,” begins a letter sent to members of the US House of Representatives by Congressman Bill Posey (R- FL District 8).

The Posey letter notes, “This past spring, we learned that the IRS used inappropriate criteria to review Tea Party and other organizations applying for tax-exempt status based upon their names and policy positions. We further learned that IRS employees illegally released donor lists of other conservative organizations.”

“As of today, not a single employee has been indicted for this offense, and the Wall Street Journal reported that the FBI does not plan to file any criminal charges. Furthermore, Ms. Lerner has invoked her Fifth Amendment right against self-incrimination before the House Oversight and Government Reform Committee and refused to answer questions,” states Posey.

Americans are growing more concerned about a bureaucrat “culture of arrogance”. Time and again the President has failed to take action against those found to have violated their duties. It is AG Holder who is accountable to the People’s House and the people. President Obama during the interview with Bill O’Reilly stated there is not a “smidgen” of corruption at the IRS. Attorney Jay Sekulow, Chief Counsel for the American Center for Law and Justice, said in public testimony that the IRS scandal goes “as high as it gets.” When O’Reilly asked the President why he has not fired HHS Secretary Sebelius the President stated, “I promise you we hold people up and down the line accountable.” Apparently this does not apply to the IRS, either.

Posey concludes his letter with:

An independent special prosecutor must therefore be appointed to oversee the IRS investigation. Such a prosecutor must be given the independence to follow the facts wherever they may lead. He or she must both prosecute any and all criminal conduct and report to Congress and the American people what occurred, why it occurred, who knew about it, and what can be done to ensure it never happens again. Furthermore, this special prosecutor must be someone whose integrity is beyond reproach – and at a minimum, he or she must not be a major financial donor to either Democratic or Republican Party campaigns. The IRS, or any other agency, must not be used for political purposes.

I therefore ask that you join me in demanding that an independent special prosecutor be appointed to investigate the IRS’s illegal targeting of conservative groups.

To date the following members of the US House of Representatives have co-signed the Posey letter:

Robert Aderholt (AL-04); Andy Barr (KY-06); Kerry Bentivolio (MI-11); Jim Bridenstine (OK-1); Mo Brooks (AL-05); Michael Burgess (TX-26); Bradley Byrne (AL-01); Howard Coble (NC-06); Ron DeSantis (FL-06); Jeff Duncan (SC-04); Blake Farenthold (TX-27); Steve Fincher (TN-08); John Fleming (LA-04); Trent Franks (AZ-08); Louie Gohmert (TX-01); Paul Gosar (AZ-04); Tim Huelskamp (KS-01); Walter B. Jones (NC-3); Steve King (IA-04); James Lankford (OK-05); Robert Latta (OH-5); Billy Long (MO-07); Blaine Luetkemeyer (MO-03); Thomas Massie (KY-04); Tom McClintock (CA-04); Mick Mulvaney (SC-05); Alan Nunnelee (MS-01); Mike Rogers (AL-03); Thomas Rooney (FL-17); Matthew Salmon (AZ-05); Jason Smith (MO-8);Randy Weber (TX-14); Ted Yoho (FL-03)

If your Congressman is not on the list you may want to ask him or her: Why?

To read the full text of the Posey letter click here.

EDITORS NOTE: Congressman Bill Posey represents Florida’s 8th Congressional District which encompasses all of Brevard and Indian River Counties, and a small portion of Orange County (Bithlo, Christmas and Wedgefield).  Posey, a Republican, was elected to U.S. House of Representatives in 2008 and is currently serving his third term.

RELATED COLUMNS‘Caught Red-Handed’: Sekulow Details New ‘Smoking Gun’ IRS Emails (+video)

RELATED VIDEO: In a hearing of the House Financial Services Committee on January 28, 2014, Congressman Posey questions Consumer Financial Protection Bureau Director Richard Cordray about the lengthy amount of time it takes for the CFPB to answer simple questions from Members of Congress.


Confirmed: The IRS Is Weaponized

It’s official! A senior member of Congress has publicly said what FairTax® supporters have known for years: The IRS is the political weapon of choice for the ruling elite!

During a recent speech to the Center for American Progress, Senator Charles Schumer (NY) called on the Executive Branch of government to bypass Congress and use the IRS to ensure that certain conservative leaning non-profits are “weakened” and their funding “curtailed”. Why?

According to numerous media reports, Schumer stated, “It is clear that we will not pass anything legislatively as long as the House of Representatives is in Republican control, but there are many things that can be done administratively by the IRS and other government agencies—we must redouble those efforts immediately.”

This should strike fear in every single citizen, regardless of political ideology. 

Congressman Schumer’s agenda is to silence the Republican majority. During the 70’s, President Nixon’s agenda was to silence the then Democratic majority. And therein lies the problem.

When the ruling class uses the IRS and the tax code to silence dissenting opinion and to control legislative agendas, all Americans lose their voice, regardless of political affiliation. And, when the means of silence is utilizing an agency that historically incorporates fear, intimidation and imprisonment as a means of enforcement, the slippery slope has begun.

It’s now pretty clear why the requested investigation of IRS abuses of conservative leaning non-profits is not going anywhere. And probably won’t.

It’s probably also why, during the 2013 tax season, nearly 20 million taxpayer calls for assistance will go unanswered. That’s right – at a time when the tax code has blown up to nearly 100,000 pages and the Obamacare regulations are in effect – good luck getting your or your preparer’s call answered. And if the IRS does answer the phone, National Taxpayer Advocate Nina Olson indicated they will only answer basic questions until April — after that, you are totally on your own. Gee thanks.

Are you elderly, disabled or low income and do you use the IRS to help you prepare your return? Sorry Charlie. They don’t do that anymore either and if you write asking for assistance, don’t hold your breath for a response – only about half the letters they receive are going to get a written response.

One can only assume the IRS is too busy supporting various political agenda’s to focus on their core mission, which is “as…one of the world’s most efficient tax administrators…. To provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.”

There is an answer to this problem.  The FairTax® Plan.

It is a simple and fair solution that is before the Committee on Ways and Means awaiting a vote. Your voice is needed now more than ever. HR 25 is a fair and simple tax replacement plan that replaces the current income tax code and abolishes the IRS.

No more unanswered IRS calls or mail, or worrying about how to prepare your tax return – there are no tax returns with the FairTax Plan. Under the FairTax your federal tax is paid each and every time you purchase new goods and services – at the cash register. And with the unique FairTax “Prebate”, your essential goods and services are always tax-free.

Don’t allow your voice to be silenced by a tax code that only allows the political agenda of the day. Contact your Representatives today, tomorrow and the next day. Call their Washington office. Call their district office.

And when Members of Congress are willing to stand tall for the FairTax, like Congressman Ander Crenshaw (FL-4) who recently released this message stating his continued support for the FairTax, take time to thank them for their support.

As Winston Churchill said, “Success is not final, failure is not fatal: it is the courage to continue that counts.”

Finally, political commentator and former Washington Post editorialist Mark Shields lamented this week about the slow progress of tax reform in Congress.

IRS Probe: A Disgraceful Investigation

 How do you hide from an obvious scandal?  Pretend it isn’t there and let the time run out the clock.

Benghazi, Fast & Furious, harassing news agencies, and the IRS targeting select groups because of their conservative politics. The list goes on.

When Nixon and Clinton were slammed with serious questions concerning possible crimes and the integrity of a sitting president, independent special prosecutors were rightfully assigned to conduct the investigation and , if necessary, reach a legal conclusion holding the guilty parties accountable for their egregious actions.

This will not happen in the Obama administration. We, the people, are not privileged to basic honesty in government.

Consider this:  The humongous IRS investigation – in which evidence exists that the government was ordering special targets for non-profit status and audits based on conservative leanings – has been assigned to a top trial lawyer in the Justice Department for investigation. Her name is Barbara Kay Bosserman. She works directly under Eric Holder.

So what? You say?

Barbara Kay Bosserman is a major contributor to the Obama campaigns in 2008 and 2012, now with personal donations of over $6000 invested in assuring her a $160,000 a year job. Is this not the ultimate in conflict of interest? As a loyal presidential bootlicker, there is NO WAY she can conduct an independent and objective investigation into the actions of the IRS, and hold the guilty parties accountable, particularly if they are close to the president, or the president himself.

That would be like assigning a lawyer for the Council on American-Islamic Relations (CAIR) the role of prosecuting the Muslim Brotherhood. They’re all part of the same ideology.

Meanwhile, the mainstream media continues to echo the democratic mantra that these are all “phony” scandals. The administration says they have more important and pressing issues to attend to.  In other words, let’s all drop it. That’s old news. Forget about it. Let time pass. “What difference does it make?” (Shhh – maybe it will go away)

We can let time pass but it doesn’t make the people in the administration and less culpable in their roles of obstructing justice. If anyone has been obstructing justice, it has been the Attorney General himself, who has been caught lying to congress more than once in his efforts to protect the president.

It is eight months since the scandal became public. So far, zilch. No one is being held responsible.

For the American people, this is a simple act of arrogance: A classic, ‘In Your Face.’ The appointment of  Barbara Kay Bosserman is one of the most audacious acts perpetrated by Holder. She is a devout follower and contributor of Barack Obama who at the very least, cannot be objective and neutral, and at the worst, can rightfully be perceived as a protectorate who will go to all lengths to prevent disgrace to cloak the White House.

The disgrace, in fact, belongs to the White House for approving a grossly biased investigation. This is not seeking justice. It’s obstructing it.

Americans: Where are your voices?

Click here: 2013 IRS scandal – Wikipedia, the free encyclopedia

Click here: JUSTICE: Feds pick Obama supporter to lead probe into IRS tea party targeting – Washington Times

FairTax Friday: “No idea of the [tax code] benefits”!

It’s January and Americans are looking for receipts and lost documentation in their annual quest to prepare their yearly tax return. Arguments will ensure, relationships will sour and health will decline. Are you having fun yet?

Have you started dealing with the significant changes that went into effect for 2013? Not to worry though, National Taxpayer Advocate Nina Olson said, “The complexities of the tax code are only affecting those of us trying to read it. Tax software makes a lot of those complexities invisible to the average taxpayer.” I’m comforted, aren’t you?

She went on to say, “As a result, taxpayers might not realize they’re being helped by a wide array of deductions and credits. “They have no idea of the benefits they are getting through the tax code.”

Wow, now we are getting benefits from the tax code!

I’m continually amazed at the way Washington “spins” tax code changes. First, Congressional leaders point to the code’s growing complexity. Congress then passes changes (you’ll have to read the legislation to know what’s in it because they are too busy to read it themselves), followed by the executive branch spinning the “benefits”.

You know better, though, don’t you? After all, you are FairTax® smart. You know the only benefits in the tax code are those carved out by special interests. You know that taxpayers are always the perennial losers when it comes to America’s income tax code.

That’s why a group of dedicated FairTax supporters are on their way to Washington this weekend to meet with Members of Congress and their staff. For two days, they plan to further educate them about the benefits of HR 25, the FairTax Act of 2013.

That’s also why the Letters to the Editor/Opinion Editorial team, led by Glen Terrell, has redoubled their efforts in making sure that the FairTax message is spread far and wide in newspapers, magazines and bogs.

Members of the House Ways and Means Committee will soon vote on tax reform. We await their vote on HR 25. It is imperative that every member of Congress knows the magnitude of support the FairTax has across America.

Have you contacted your elected representatives to share with them where you stand on the FairTax? If so, did you only contact their Washington office?

We know that Member’s district directors (DD’s) also report on what issues constituents are contacting them about at the local level. Some DD’s have told us they rarely hear about the FairTax, yet we know you are contacting the Representative’s Washington office.

Have you gone on your Member’s Facebook page and weighed in on the “benefits” you derive from the tax code versus why you support the FairTax plan? Please take 5 extra minutes and call your Representative’s Washington and district offices.

How does Your State Tax Computer Software?

Joseph Henchman and Richard Borean from the Tax Foundation a hard look at how states tax computer software.
Get 45 public finance experts in a room and most will agree that a sales tax should apply to all final sales but not to business purchases, so each product is taxed once and only once. The 45 states with sales taxes do the opposite, exempting many final sales and taxing many business purchases.”

Sales tax treatment of software is the subject of this week’s Tax Foundation map. Ideally, all software purchases should be taxable to final users and exempt for business users. Instead, states tax some kinds of software and exempt others, based on whether it is customized or off-the-shelf and whether it is on CD or downloaded, all silly distinctions for tax purposes. States like Hawaii, New Mexico, South Dakota, Tennessee, and Texas are at least consistent in taxing it all. No state exempts it all, although Florida and Maryland come close. As for why Arkansas, Ohio, and South Carolina tax custom software when you buy it on a CD but exempt it when you download it, your guess is as good as ours.

We present state tax treatment of five different kinds of software: (1: triangle) pre-made “canned” software purchased in the form of tangible property like a disk or CD; (2: square) canned software downloaded directly onto a computer; (3: circle) custom software purchased on a disk or CD; (4: starburst) custom software downloaded; and (5: star) custom software customized by the user for their use.

(Click on the map to enlarge it. View previous maps here.)

How did the FL Congressional Delegation vote on the $1.1 Trillion Omnibus Spending Bill?

It seems Congress just can’t cut spending or the debt these days. Of course, it is an election year and you would think with all the Florida Congressional delegation members up for reelection in 2014 they would be just a little bit fiscally conservative. If you believe that I have a bridge from Miami to Cuba to sell to you.

The Consolidated Appropriations Act of 2014 (H.R.3547), better known as the omnibus appropriations package, increases base discretionary spending by $24 billion in FY 2014. Heritage Action states, “The omnibus takes the country in the wrong direction, both in terms of policy and overall spending levels.”

This omnibus bill funds a Tamiami Trail Project (subject to availability of funds) and acquiring lands for Everglades restoration. The word “abortion” appears twenty-seven times in the bill. The word “sterilization” appears six times and the words “subsidy and “healthcare” eleven times each.

Sorry no tax refunds are in the bill for us Floridians.

“On top of increasing overall spending the $1.1 trillion omnibus spending bill irresponsibly increases funding for failing programs like Head Start, funds flood insurance subsidies, and pays for ineffective green energy projects. Additionally, an Obamacare funding loophole could provide subsidies to health plans that cover abortion,” notes Heritage Action.

Heritage Action reports, “Lawmakers and their constituents had less than 48 hours to read the 1,582-page bill before the House voted. On Wednesday, the House passed the $1.1 trillion spending bill, 359 to 67 (with three liberals voting no). Now the spending bill moves to the Senate, where a vote is expected this week. The omnibus takes the country in the wrong direction, both in terms of policy and overall spending levels.”

So how did the Florida Congressional delegation vote? Here are who voted YES, NO and DNV:

Voted YES on Omnibus Spending Bill:


Voted NO on Omnibus Spending Bill:


Did not vote (DNV) on Omnibus Spending Bill:



Who Read 1,582-Page $1.1T Spending Bill? Congressman: ‘Nobody Did’

Fed Owns 64% More U.S. Government Debt Than China (+video)

China Now Owns a Record $1.317T of U.S. Government Debt now accepts payment in Bitcoin

I wrote a column questioning if 2014 would be the breakout year for the Bitcoin. It appears that it very well may be! John Stossel from Fox Business News reports:

The big online retailer now accepts payment in Bitcoin. That’s good news for lovers of liberty because Bitcoins give us an alternative to government-controlled money. Bitcoins are a currency created by anonymous, private tech nerds, not by government.

Governments don’t like competition, and our government sometimes bans competing currencies. But as more of us use Bitcoins, and more businesses accept payment in Bitcoin, it becomes harder for government to dismiss the currency as illegitimate, or ban it.

There are two advantages to Bitcoin.

First, it’s harder to trace transactions back to people who make trades. I don’t particularly care about that, because at the moment, I don’t hide anything from my government. But I do fear government destroying the value of my dollars by printing more of them, the way governments in Germany before World War II and in Zimbabwe in recent decades did, forcing people to make trades using wheelbarrows of nearly worthless bills.

“Bitcoins are not controlled by anybody,” states Mercatus Center senior research fellow Jerry Brito.

Bitcoins have become a concern for central banks and governments around the world. They are beginning to fear it and with that will come efforts to control it. Bitcoins, much like the TEA Party movement, are hard to control. But that does not mean the powers to be won’t try.

Stossel notes, “The biggest risk to private currencies may be that governments will become jealous of how well these upstart forms of money work. If people all over the world decide to trade in digital currencies, it will become more obvious than ever that government isn’t what makes economic activity happen. It will also be harder to trace — and tax — people’s economic activity. Government doesn’t like to get sidelined. To its credit, the German government announced that it recognizes Bitcoin as a legal alternate currency.” Read more.

Bitcoins will truly breakout when businesses small and large not only accept them but can use them to pay their utility bill, purchase raw materials and pay their employees. If you want to see the future of Bitcoins then watch the new FOX TV series “Almost Human“.

Fasten your seat belts this will be a wild ride.

The Tax Foundation’s Outstanding Achievement in State Tax Reform goes to —

The Tax Foundation is honoring six individuals with awards for Outstanding Achievement in State Tax Reform. As the name of the award suggests, the honorees were selected for their extraordinary efforts to advance the cause of simpler, smarter tax policy in the previous year.

2013 was an exciting year for tax reform throughout the states. Numerous legislators made commitments to smarter, more principled tax policy. We are excited to introduce this new award in recognition of their efforts and are encouraged by the growing support for the kinds of policies this year’s honorees have worked toward.

The following individuals are the recipients of the 2013 Outstanding Achievement in State Tax Reform award:

Indiana Governor Mike Pence in 2013 achieved an income tax reduction while maintaining the state’s scheduled reduction in corporate taxes and elimination of the inheritance tax. Building on the administrative reform work of his predecessor Gov. Mitch Daniels, Pence has sought further business tax reforms, continued budget restraint, and a determination to make Indiana more attractive to investment and growth.

Michigan Governor Rick Snyder in 2011 achieved the elimination of the state’s unique and economically destructive Michigan Business Tax (MBT) replacing it with a corporate income tax. Snyder has also successfully scaled back overly generous business tax incentives and demanded greater accountability and transparency from the ones that remain.

New Mexico Governor Susana Martinez proposed a far-reaching business tax reform and, by skillfully working with the Legislature, signed into law in 2013 a final bill that included much of what she had sought. Provisions include a reduction in the corporate tax rate from 7.6 percent to 5.9 percent over several years, tightening of some tax credits, and improvements to tax administration.

North Carolina Senator Phil Berger in 2013 led the legislative effort to enact the year’s most significant state tax reform, offering an impressive initial proposal and ultimately crafting the version that became law. Provisions include reducing the individual income tax from a top rate of 7.75 percent to a flat rate of 5.75 percent by 2015, a more generous standard deduction for all taxpayers, a reduction in the corporate tax rate from 6.9 percent to 5 percent by 2015, and an immediate repeal of the estate tax.

Ohio activist Ron Alban in 2011 created and coordinated a grassroots effort of thousands that led to the repeal of the state’s estate tax beginning in 2013. With an exemption level of just $338,333, about 8,000 estates each year paid the tax in Ohio, harming family businesses and investment. Alban’s coalition-building skills and persistence overcame strong opposition by special interests and local governments that sought to preserve the tax.

Wisconsin Representative Dale Kooyenga championed pro-growth state tax reform and worked to ensure that the 2013 budget included income tax reductions and some business reforms. While a modest first step, they are a result of Kooyenga’s expertise and ability to craft reasonable, practical solutions to widely acknowledged problems with the state’s tax system.

Tax Topic State Tax and Spending Policy

The 13 Tax Increases of 2013 – Gird Your Loins, more coming in 2014!

Curtis Dubay from The Foundry writes, “It’s about time for us to uncover our eyes and take a hard look at what 2013 did to our finances. Did you feel the pinch of the 13 tax hikes that hit Americans this year?”

Before you review the list below, put these two on your watch list for 2014:

  • Obamacare’s individual mandate. Beginning in 2014, it’s mandatory to purchase health insurance. If you don’t, you’ll pay a penalty that dramatically increases over time. It starts at $95 or 1 percent of your income (whichever is greater). It rises to $325 or 2 percent of income in 2015, and $695 or 2.5 percent of income in 2016.
  • Obamacare tax on insurance companies. If you liked seeing your premiums go up, you’ll love this new tax on health insurers—which they are most likely to pass on to you.

As you start reviewing your tax information for 2013, here’s what you’re contending with.

The 13 Tax Increases of 2013

1. Payroll Tax: increase in the Social Security portion of the payroll tax from 4.2 percent to 6.2 percent for workers. This hit all Americans earning a paycheck—not just the “wealthy.” For example, The Wall Street Journal calculated that the “typical U.S. family earning $50,000 a year” would lose “an annual income boost of $1,000.”

2. Top marginal tax rate: increase from 35 percent to 39.6 percent for taxable incomes over $450,000 ($400,000 for single filers).

3. Phaseout of personal exemptions for adjusted gross income (AGI) over $300,000 ($250,000 for single filers).

4. Phase down of itemized deductions for AGI over $300,000 ($250,000 for single filers).

5. Tax rates on investment: increase in the rate on dividends and capital gains from 15 percent to 20 percent for taxable incomes over $450,000 ($400,000 for single filers).

6. Death tax: increase in the rate (on estates larger than $5 million) from 35 percent to 40 percent.

7. Taxes on business investment: expiration of full expensing—the immediate deduction of capital purchases by businesses.

Obamacare tax increases that took effect:

8. Another investment tax increase: 3.8 percent surtax on investment income for taxpayers with taxable income exceeding $250,000 ($200,000 for singles).

9. Another payroll tax hike: 0.9 percent increase in the Hospital Insurance portion of the payroll tax for incomes over $250,000 ($200,000 for single filers).

10. Medical device tax: 2.3 percent excise tax paid by medical device manufacturers and importers on all their sales.

11. Reducing the income tax deduction for individuals’ medical expenses.

12. Elimination of the corporate income tax deduction for expenses related to the Medicare Part D subsidy.

13. Limitation of the corporate income tax deduction for compensation that health insurance companies pay to their executives.

President Obama demanded these higher taxes, but they did nothing to address the actual cause of our deficit and debt problem: too much spending. The proper way to address this problem is through reforms to entitlement programs.

President Obama promised the American people a “balanced approach” of tax increases and spending cuts to reduce deficits and debt. He achieved the tax increase portion of that approach. Now Congress needs to force him to follow through on the spending cuts.