“The U.S. Is Alone” And Why It Hurts

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“The tax rate of 35 percent is impossible to provide an incentive to the large corporations, that have $1.7 trillion offshore, to put their money back in the United States.” – Frederick W. Smith

In March of 2011, Pfizer Pharmaceutical CEO Ian Read told The Wall Street Journal, “There should be a tax rate that allows us to compete… in the global marketplace.”

Later that year, H.R. 25, “The FairTax Act” co-author and economist Dan Mastromarco testified before the Joint Economic Committee that America’s corporations were paying “a national statutory marginal [tax] rate of 35 percent, which masks the fact that the return on capital is taxed repeatedly. These rates impose efficiency costs of as much as $728 billion.”

Mastromarco added, “The U.S. is alone in applying its punishing rates – the highest in the OECD and 50 percent higher than the average OECD rate of 23 percent — to domestic and foreign earnings alike.”

Congress failed to heed these and other warnings and as a result, a flood of companies has continued move their production and headquarters operations outside the United States.

In fact, after 165 years, America’s pharmaceutical giant Pfizer is merging with British competitor AstraZeneca and moving their headquarters offshore to avoid our punitive, corrupt and totally politicized income tax system; a tax system that Congress continues to protect with the fervor of a mother bear standing guard over her cubs. A system Pfizer itself helped create with an army of the best loophole lobbyists their earnings could buy.

Adding insult to injury, this week Financial Times made national news with their headline story, “China poised to pass US as world’s largest economic super power this year.”

And yet, Congress continues blindly advocating politically polarizing, pro-income tax economic policies that are driving this nation and her people straight into the economic ditch.

There is a tough love solution to this problem that eliminates the primary enabler of Washington’s lust for power, greed and control. That solution – the FairTax® Plan.

The FairTax eliminates all forms of taxation on income, funds the federal government from a national sales tax on new goods and services only, and provides eligible taxpayers with 12 monthly, Prebate checks to purchase essential goods and services tax-free.

This provision provides a significant windfall for low-income families who will take home the full spending power of their entire paycheck. The FairTax also disbands, defunds and eliminates  the IRS in its entirety.

Just as importantly, the FairTax will negate corporate America’s need to move offshore in order to avoid America’s punitive tax code.

It is past time that corporate executives turn their focus away from the special interests, loophole gravy train of the past and present, and towards the economic boon they can enjoy when the FairTax is enacted.

This is where you have a tremendous opportunity to make a major difference for the FairTax campaign.

You are corporate America’s customers – you buy their products and services. And unlike our Congress that only seems to respond to special interests and large donors, corporations do listen to the lifeblood of revenue – the customer.

Think about your favorite products and or services and make a list of your five most favorite, publicly traded corporations. Go to the company’s website investor page and you will find the name and mailing address for their executives and board of directors.

Take a few moments and write some good, old-fashioned snail mail notes. Share why you support the FairTax and why they should too. Send them a copy of Dan Mastromarco’s white paper, “The FairTax: The Key to Restoring America’s International Competitiveness,” which you can download on the right hand side of this newsletter under “Featured Document”. The mere fact that you send a note through the mail will get their attention.

And let us know if you get a response. If possible, send us a copy of your outgoing note. You can send this to info@fairtax.org or AFFT, PO Box 27487, Houston, TX 77227-7487.

It is indeed painful to read today’s business headlines. America is hungry. She needs jobs, she needs her corporations brought home and she needs our getting the FairTax enacted.

The 2014 state of wind energy: Desperately seeking subsidies by Marita Noon

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With the growing story coming out of Ukraine, the ongoing search for the missing Malaysian jet, the intensifying Nevada cattle battle, and the new announcement about the additional Keystone pipeline delay, little attention is being paid to the Production Tax Credit (PTC) for wind energy—or any of the other 50 lapsed tax breaks the Senate Finance Committee approved earlier this month. But, despite the low news profile, the gears of government continue to grind up taxpayer dollars.

The Expiring Provisions Improvement Reform and Efficiency Act (EXPIRE) did not originally include the PT; however, prior to the committee markup hearing on April 3, Senators Charles Grassley (R-IA), Michael Bennet (D-CO), and Maria Cantwell (D-WA) pushed for an amendment to add a 2-year PTC extension. The tax extender package passed out of committee and has been sent to the Senate floor for debate. There, its future is uncertain.

“If the bill becomes law,” reports the Energy Collective, “it will allow wind energy developers to qualify for tax credits if they begin construction by the end of 2015.” The American Wind Energy Association’s (AWEA) website calls on Congress to: “act quickly to retroactively extend the PTC.”

The PTC is often the deciding factor in determining whether or not to build a wind farm. According to Bloomberg, wind power advocates fear: “Without the restoration of the subsidies, worth $23 per megawatt hour to turbine owners, the industry might not recover, and the U.S. may lose ground in its race to reduce dependence on fossil fuels driving global warming.” \

NRELThe National Renewable Energy Laboratory released a report earlier this month affirming the importance of the subsidies to the wind industry. It showed that the PTC has been critical to the development of the U.S. wind power industry. The report also found: PTC “extension options that would ramp down by the end of 2022 appear to be insufficient to support recent levels of deployment.… Extending the production tax credit at its historical level could provide the best opportunity to sustain strong U.S. wind energy installation and domestic manufacturing.”

The PTC was originally part of the Energy Policy Act of 1992. It has expired many times— most recently at the close of 2013. The last-minute 2012 extension, as a part of the American Tax Relief Act, included an eligibility criteria adjustment that allows projects that began construction in 2013, and maintain construction through as long as 2016, to qualify for the 10-year tax credit designed to establish a production incentive. Previously, projects would have had to be producing electricity at the time the PTC expired to qualify.

Thomas Pyle, president of the American Energy Alliance, which represents the interests of oil, coal, and natural gas companies, called the 2013 expiration of the wind PTC “a victory for taxpayers.” He explained: “The notion that the wind industry is an infant that needs the PTC to get on its feet is simply not true. The PTC has overstayed its welcome and any attempt to extend it would do a great disservice to the American people.”

As recently as 2006-2007, “the wind PTC had no natural enemies,” states a new report on the PTC’s future. “The Declining Appetite for the Wind PTC” report points to the assumption that “all extenders are extended eventually, and that enacting the extension is purely a matter of routine, in which gridlock on unrelated topics is the only source of uncertainty and delay.” The report then concludes: “That has been a correct view in past years.”

The report predicts that the PTC will follow “the same political trajectory as the ethanol mandate and the ethanol blenders’ tax credit before it.” The mandate remains—albeit in a slightly weakened state—and the tax credit is gone: “Ethanol no longer needed the blenders’ tax credit because it had the strong support of a mandate (an implicit subsidy) behind it.”

The PTC once enjoyed support from some in the utility industry that needed it to bolster wind power development to meet the mandates. Today, utilities have met their state mandates—or come close enough, the report points out: “their state utility commissioners will not allow them to build more.” It is important to realize that the commissioners are appointed or elected to protect the ratepayers and insure that the rates charged by the utilities are fair and as low as possible. Because of the increased cost of wind energy over conventional sources, commissioners won’t allow any more than is necessary to meet the mandates passed by the legislatures.

The abundance of natural gas and subsequent low price has also hurt wind energy’s predicted price parity. South Dakota Gov. Dennis Daugaard (R), in Bloomberg, said: “If gas prices weren’t so cheap, then wind might be able to compete on its own.” David Crane, chief executive officer of NRG Energy Inc.—which builds both gas and renewable power plants—agrees: “Cheap gas has definitely made it harder to compete.” With the subsidy, companies were able to propose wind projects “below the price of gas.” Without the PTC, Stephen Munro, an analyst at New Energy Finance, confirms: “we don’t expect wind to be at cost parity with gas.”

The changing conditions combined with “wide agreement that the majority of extenders are special interest handouts, the pet political projects of a few influential members of Congress,” mean that “the wind PTC is not a sure bet for extension.” Bloomberg declares: “Wind power in the U.S. is on a respirator.” Mike Krancer, who previously served as secretary of the Pennsylvania Department of Environmental Protection, in an article in Roll Call, states: “Washington’s usual handout to keep the turbines spinning may be harder to win this time around.”

Despite the claim of “Loud support for the PTC” from North American Windpower (NAW), the report predicts “political resistance.” NAW points to letters from 144 members of Congress urging colleagues to “act quickly to revive the incentives.” Twenty-six Senate members signed the letter to Senate Finance Committee Chairman Ron Wyden (D-OR), and 118 House members signed a similar letter to Speaker John Boehner (R-OH). However, of the 118, only six were Republicans—which, even if the PTC extension makes it out of the Senate, points to the difficulty of getting it extended in the Republican-controlled House.

Bloomberg cites AWEA as saying: “the Republican-led House of Representatives may not support efforts to extend the tax credits before the November campelection.” This supports the view stated in the report. House Ways & Means Committee Chairman David Camp (R-MI) held his first hearing on tax extenders on April 8. He only wants two of the 55 tax breaks continued: small business depreciation and the R & D tax credit. The report states: “Camp says that he will probably hold hearings on which extenders should be permanent through the spring and into the summer. He hasn’t said when he would do an extenders proposal himself, but our guess is that he will wait until after the fall elections. …We think the PTC is most endangered if Republicans win a Senate majority in the fall.”

So, even if the PTC survives the current Senate’s floor debate (Senator Pat Toomey [R-PA] offered an amendment that would have entirely done away with the PTC), it is only the “first step in a long journey” and, according to David Burton, a partner at law firm Akin Gump Hauer and Feld, is “unlikely on its own to create enough confidence to spur investment in the development of new projects.” Plus, the House will likely hold up its resurrection.

Not to mention the growing opposition to wind energy due to the slaughter of birds and bats—including the protected bald and golden eagles. Or, growing fears about health impacts, maintenance costs, and abandoned turbines.

All of these factors have likely led Jeffrey Immelt, chief executive officer of General Electric Co.—the biggest U.S. turbine supplier—to recently state: “We’re planning for a world that’s unsubsidized. Renewables have to find a way to get to the grid unsubsidized.”

Perhaps this time, the PTC is really dead, leaving smaller manufacturers desperately seeking subsidies.

About the Author: Marita Noon

Marita NoonThe author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). Together they work to educate the public and influence policy makers regarding energy, its role in freedom, and the American way of life. Combining energy, news, politics, and, the environment through public events, speaking engagements, and media, the organizations’ combined efforts serve as America’s voice for energy.

Bad Behavior Bonuses

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Imagine you have a job and the company you work for provides you a credit card for your company travel needs, gives you a generous salary with yearly increases plus bonuses and provides you with what most would consider a generous benefits package.

All you have to do is come in, do your job and abide by the rules.

Instead, you decide to misuse the credit card, take drugs, make violent threats and claim fraudulent unemployment benefits. If lucky, you might be afforded a trip to a professional counselor and put on a performance improvement plan. But, most likely you would be sacked – fired – sent out the door.

That’s how it is in the private sector. Not so in our federal government – the same government that spends your hard earned tax dollars.

In fact, just this week the IRS Inspector General announced that more than $2.8 billion in bonuses was paid to IRS employees with disciplinary problems. Included in that $2.8 billion was $1 million paid to IRS employees who owe back taxes!

Repeat – the IRS paid $1 million of your blood, sweat and tears to IRS employees who skipped out on paying their fair share!

It gets better. At the IRS, you can misuse your travel card, take drugs, make violent threats, claim fraudulent unemployment benefits and fail to pay your federal taxes, and still get a bonus and additional paid time off.

In fact, the Wall Street Journal reported this week that the IRS awarded approximately “11,000 hours of paid time off to nearly 1,200 IRS employees with tax issues or official-conduct violations.” They added, “one employee who was suspended for 10 days in September 2011 received a $1,300 performance award in August 2012, the report said.”

You know ladies and gentleman this truly goes beyond egregious. It is the thumbing of the middle finger to those who toil every day to pay for their outrageous behavior. And every member of Congress who doesn’t immediately stand for the elimination of the IRS and the income tax tacitly gives their approval of this insult on the American taxpayer.

And, standing up on the floor of the House and Senate and boasting that, “I have drafted legislation that will prohibit this kind of behavior” is in a word, a cop-out. The people, especially FairTax® supporters, see through this kind of bravado.

There is only one way to solve this continuing problem. It is the enactment of HR 25/ S 122, the FairTax® Act – the only legislation before Congress that defunds and disbands the IRS in its entirety. The flat tax won’t, a VAT won’t and the much-acclaimed “tax reform” plan heralded by the Ways and Means Chairman won’t either.

Only the FairTax eliminates the IRS.  So, when someone tells you, “I am for the elimination of the IRS and the income tax – with a post card tax return” – give them the facts.

And when your elected representative gives you a canned ham response about how outraged they are about what is happening at the IRS and then proceeds to submit new legislation – remind them about the FairTax and move on. Why?

Very simply, this November you will have an opportunity to express your voice in a very meaningful way with those who support the FairTax. And I promise you, millions of people who go to work every day – who abide by the rules, do their job and pay their taxes – will thank you.

Time to abolish Florida Property Taxes

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The time has come to address the matter of abolishing property taxes in Florida and returning our homes, land and infrastructure back into the hands of its owners not the landlord in the Tax Collector and County Property Appraisers.

This will reduce your house payment, it will give you back the freedom of property ownership without fear of having your home confiscated. It frees you from the subservient position as renter to the tax collection office even if your home is paid for. It will empower you and put the government back in its place as your servant, not your master.

It does not matter if you own a $50,000 double wide trailer or a $50 million mansion. If you own it, you worked for it and the government has no claim on it. PERIOD. Ever.

Progressive politicians from both political parties embrace property taxes and the power it gives them and the government over your accumulated wealth. You work hard you raise your families and yet you are chained to the wall of City Hall and the County Administration building. Enough already. Its time to stop this redistribution of wealth.

What is a Budget?

You all have a family and or a household budget. In our local government an annual budget is a financial, operating, and capital plan for the coming fiscal year. It provides an outline of service levels provided to the citizen and public capital investments in the community, to be used by both you the citizen and the local government.

What is a Millage Rate?

The millage rate is the tax rate that is applied to property values to generate the revenue needed to pay for services proposed in the budget. A mill is a rate of tax equal to $1 for each $1,000 of assessed taxable property value. If a piece of property has a taxable value of $100,000 and the millage rate is 1, the property owner would pay $100 in taxes.

The time has come to zero out the millage rate and fire the landlord (County Tax Collector and Property Appraiser). All services being paid for in property taxes need to be funded from revenues that come from the sale of goods and services not your home or business structure and land. Each county must cut its waste and ensure good stewardship of tax dollars to help. From what  I can see (after reviewing the county budgets in all 67 counties) there is massive waste and abuse of taxpayer money including big salaries for executives, etc. Shall I can continue?

The County Tax Collector, with the assistance of the Property Appraiser, is nothing more than an over paid landlord sucking the citizenry dry and redistributing their wealth to local government agencies.

Proposal

Request that all Florida law makers that agree start drawing up plans for the FY 15 legislative session in March 2015 to abolish property taxes.

Tax payer money spent to fund illegal immigrants, their education, their health care and the like must be cut off and this money used to fill part the void in the loss of property tax revenues. Annually Florida tax payers fork out $5 billion to educate, medicate and incarcerate illegal aliens. This would free up more than enough cash to help in the elimination of property taxes statewide in Florida. The 67 counties can divvy up this savings to pay their police and fire departments. The lottery offsets the cost for schools.

The median property tax in Florida is $1,773.00 per year for a home worth a median value of $182,400.00. Florida counties collect an average of 0.97% of a property’s estimated fair market value as property tax. This money belongs in the pocket of the homeowners not the government. The government did nothing to build this house other than regulate the builders to appease tree huggers and spotted owl lovers.

Section 200.065 of State Statutes outlines the rolled-back millage rate, known as the “no tax increase” rate

because it allows the entity to generate the same property tax revenue from year to year, adjusted only by any new properties that may have been placed on the property tax roll. I want his statute to read – zero state wide and the property taxes returned to the control of Florida citizens.

Let’s see who has the guts to tear down the statist tax and spend legislature and return the wealth accumulated from hard working Americans in property taxes and put it back in their wallets.

The Progressive Income Tax: Backed by the envious, used by the greedy by DOUG BANDOW

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Most Americans dislike the income tax, now more than a century old. The rates are too high. The provisions are unfair. The recordkeeping is onerous. The revenues are wasted.

Other than that, Mrs. Lincoln, how was the play?

But there are fans. The politicians, certainly, of both parties. What good would it do to serve in Congress if you didn’t have any money to spend? There are other sources of public money, to be sure, but none so effective at plucking the geese while minimizing the hissing. Withholding means many Americans look forward to receiving a refund even though that means they have provided an interest-free loan to the very officials conscripting people’s money for dubious purposes.

The beneficiaries of the politicians’ largesse also share in the income-tax lovefest. Uncle Sam needs money to write checks. He can borrow, but there’s a limit to investors’ credulity. Borrow too much and they might doubt Washington’s ability to repay. Moreover, robust tax collections are necessary to repay debts. So creditors, too, benefit from the income tax, even if they don’t enjoy paying on the other end.

Don’t forget about the armies of tax preparers and IRS agents who, at the end of the day, end up with much of the deadweight loss.

Then there are the fans of expensive and expansive government. Jonathan Cohn of the New Republic argued that the money collected has gone for building infrastructure, cleaning the environment, and keeping us safe from foreign threats. Alas, a lot of federal building is politically driven, conservation measures spend huge amounts inefficiently to control minimal problems, and military outlays go to defend scores of foreign societies rather than our own. In all these cases, less would be more.

More dangerous may be the social engineers. For instance, Yale economics professor Robert J. Shiller suggested using the income tax to mitigate “some of the worst consequences of income inequality.” He proposed indexing taxes to income inequality.

It’s a genuinely nutty idea: Inequality measures are sensitive to data distortion based on dates chosen, units measured, and more. Moreover, they incorporate no judgments about how the inequality arose. Were opportunities obstructed, systems manipulated, wealth extracted, people defrauded? Or did a generally free society operate naturally and deliver ever-changing income and wealth patterns? If the latter, what is the government trying to “correct”? And if the former, is the government correcting the right things?

Worse, though, is the weird presumption that seizing private wealth from mostly productive taxpayers and giving it to political operators noted for their electoral skills rather than economic judgment would somehow remedy financial disparities. There is no evidence that increasing Washington’s resources would yield greater social or economic justice, improve economic efficiency or growth, or make people wealthier or freer.

To the contrary, experience demonstrates that the majority—most people outside of those who make their living from the federal trough—are likely to end up worse off. Extensive bureaucracies soak up a lot of money before it leaves government hands. Cash gets tossed at influential interest groups, such as businesses, non-profits, contractors, and unions. Benefits for the poor are dwarfed by middle class welfare, such as Social Security and Medicare. Federal largesse gets bestowed on foreigners through misnamed foreign aid, which long meant taking money from poor people in rich countries and giving it to rich people in poor countries. America’s defense budget is another form of foreign aid, subsidizing some of the wealthiest countries on the planet.

Providing more money to expand these and other programs is supposed to close the income and wealth gaps? The social engineers just assume that the benevolent dictator model, in which angels enact direct transfers that make people healthier and happier, can actually exist.

Unfortunately, the income tax creates additional harms. By taxing work, the levy discourages work. The higher the rate, the greater the incentive to choose leisure and invest in consumption and tax shelters. Moreover, credits and deductions give legislators the opportunity to play social engineers, providing subsidies and manipulating behavior sub rosa.

The greater the resulting complexity, the more wealth is wasted in compliance activities rather than invested in productive endeavors. Indeed, the system most benefits tax professionals who profit from the system’s failings. Today the tax code and IRS rules run nearly 75,000 pages. And there never is any certainty; my Cato Institute colleague Chris Edwards noted nearly 5,000 tax changes over the last decade. Ever-confused taxpayers are a captive audience for tax preparers and litigators.

Income taxes impose a number of other burdens. There is no financial privacy, since Uncle Sam is empowered to rummage through everyone’s personal affairs. And taxpayers are expected to maintain potentially extensive records for possible inspection for years. For instance, use a home office and you’d better keep your utility bills, home repair charges, and gasoline receipts!

Moreover, as Edwards pointed out, the entire enforcement process is built around a denial of due process. From start to finish the burden of proof falls on the taxpayer, not the government. The Fifth Amendment right against self-incrimination is out the window. Fourth Amendment protections against unreasonable searches and seizures don’t apply. Sixth and Seventh Amendment guarantees of a jury trial don’t cover the U.S. Tax Court.

Contrast this with the sales tax. You pay it when you purchase something and you are done with it. You don’t have to keep personal records. You don’t have to file a return. There is no government rummaging around through your bank records for enforcement.

Even social engineering usually is at a minimum. Consumption levies typically include little variations of rates among goods, with at most occasional exemptions of “necessities” and surcharges for “luxuries.” There seldom is much attempt to manipulate rates to achieve objectives other than raising revenue. Even politicians don’t claim that they can use the sales tax to solve the “problem” of income inequality.

The first income tax in U.S. history was proposed in 1814 to fund the ill-fated War of 1812. Happily, the conflict ended before Congress could demonstrate the dire consequences even of taxation with representation. In 1861, a desperate national government turned to the income tax to fund its war to conquer the Southern states seeking to separate. Americans sacrificed both independence and liberty in that conflict.

A search for revenue to replace declining tariff collections led to another income tax in 1894, but the Supreme Court declared the levy unconstitutional. Legislators probably could have met the jurists’ objections by scaling back the tax. Instead, 15 years later Congress proposed a constitutional amendment, which was approved on February 2, 1913, during the heyday of the Progressive Era. From modest beginnings it has grown into a monster.

There is a necessary role for government, but it is far more limited than today’s Leviathan in Washington. Government must be funded, but it should be by something other than today’s income tax, which has made it far too easy for politicians to mulct the public. There are many reasons for Americans’ steady and serious loss of liberty, but the income tax ranks high among them.

doug bandowABOUT DOUG BANDOW

Doug Bandow is a senior fellow at the Cato Institute and the author of a number of books on economics and politics. He writes regularly on military non-interventionism.

EDITORS NOTE: The featured photo is courtesy of FEE and Shutterstock.

Shock Study: As public school funding increased student SAT scores decreased

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Long-term trends in academic performance and spending are valuable tools for evaluating past education policies and informing current ones. But such data have been scarce at the state level, where the most important education policy decisions are made. State spending data exist reaching back to the 1960s, but the figures have been scattered across many different publications. State-level academic performance data are either nonexistent prior to 1990 or, as in the case of the SAT, are unrepresentative of statewide student populations.

Using a time-series regression approach described in a separate publication, this CATO Institute paper adjusts state SAT score averages for factors such as participation rate and student demographics, which are known to affect outcomes, then validates the results against recent state-level National Assessment of Educational Progress (NAEP) test scores.

This CATO study produces continuous, state-representative estimated SAT score trends reaching back to 1972.

The CATO Institute presents paper charts of these trends against both inflation-adjusted per pupil spending and the raw, unadjusted SAT results, providing an unprecedented perspective on American education inputs and outcomes over the past 40 years.

The CATO study found:

In general, the findings are not encouraging.

Adjusted state SAT scores have declined by an average of 3 percent. This echoes the picture of stagnating achievement among American 17-year-olds painted by the Long Term Trends portion of the National Assessment of Educational Progress, a series of tests administered to a nationally representative sample of students since 1970. That disappointing record comes despite a more-than-doubling in inflation-adjusted per pupil public-school spending over the same period (the average state spending increase was 120 percent).

Consistent with those patterns, there has been essentially no correlation between what states have spent on education and their measured academic outcomes. In other words, America’s educational productivity appears to have collapsed, at least as measured by the NAEP and the SAT.

That is remarkably unusual. In virtually every other field, productivity has risen over this period thanks to the adoption of countless technological
advances—advances that, in many cases, would seem ideally suited to facilitating learning. And yet, surrounded by this torrent of progress, education has remained anchored to the riverbed, watching the rest of the world rush past it.

Not only have dramatic spending increases been unaccompanied by improvements in performance, the same is true of the occasional spending declines experienced by some states. At one time or another over the past four decades, Alaska, California, Florida, and New York all experienced multi-year periods over which real spending fell substantially (20 percent or more of their 1972 expenditure levels). And yet, none of these states experienced noticeable declines in adjusted SAT scores—either contemporaneously or lagged by a few years. Indeed, their score trends seem entirely disconnected from their rising and falling levels of spending. [Emphasis added]

Following are the state charts for Florida:

florida education trends cato 1

florida sat trends cato

To view the results for your state go to State Education Trends

RELATED STORY: More Bad News from Government-Run Education: The Corrosive Centralization of Common Core

cato school scores

For a larger view click on the chart. Courtesy of CATO Institute.

Now Is The Time For Congress To Pass The FairTax by Rep. Ander Crenshaw (FL-4)

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With America’s April 15 tax filing day just a couple days behind us, I must reiterate my strong support for passage of the FairTax Act of 2013. American individuals and businesses spend roughly $265 billion and over 6 billion hours every year filing their tax returns.

This costly and complicated tax code has grown to over 3.8 million words and over 70,000 pages of burdensome regulations and loopholes. This amount of time and money can be better spent on growing the economy and creating jobs, and implementing the FairTax would help do just that.

Americans deserve to keep more of their paycheck in their wallets and bank accounts. The FairTax replaces the current federal tax code with a national sales tax on all goods and services sold in the United States. Federal income taxes, FICA payroll taxes, and the death tax would all be eliminated, and the Internal Revenue Service (IRS) would no longer be needed as the states would be in charge of collecting all revenue.

As Chairman of the House Financial Services and General Government Appropriations Subcommittee, my Subcommittee directly oversees the IRS budget. The IRS plays a critical role in our nation’s tax administration by providing services to help Americans comply with their tax obligations and pursuing those who are not paying their fair share.

However, the IRS is encumbered with the large task of processing over 237 million tax returns that result in the collection of $2.5 trillion in taxes and $373 billion in refunds annually for a price of over $11 billion annually in hard-earned taxpayer dollars. These are billions of dollars that Americans don’t need to be sending to Washington to fund big and costly government programs.

The FairTax protects the poor and treats everyone equally: no exemptions, no exclusions, no advantages.

People would be allowed to keep their entire paycheck and spend hard-earned dollars on ways that best suit them. In addition, consumers would see savings in the price of goods and services from no longer required hidden business taxes. And on the business side of the equation, labor costs are lowered by eliminating payroll taxes and allowing businesses to hire more workers.

A tax code that is simpler, fairer, and more competitive is what our country needs to spur economic growth. By adding the FairTax to the equation we give individuals, families, and businesses yet another tool to achieve economic peace of mind now and in the future.

In the end, citizens in Florida and across the country know best how to spend their money and deserve to keep more of it in their wallets and bank accounts. Congress needs to take action to make responsible fiscal policy changes that will help strengthen our Nation’s future. That means passing the FairTax sooner rather than later.

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FairTax Volunteer Spotlight – Tax Day

California volunteer State Director, Jim Donnell sent us a note about a Tax Day rally at the California State Capitol:

“The FairTax booth was a popular spot. We had over 90 people sign post cards to be sent off to their representatives in Congress urging them to support the FairTax. We handed out well over 100 FairTax fliers and handed out a bunch of FairTax pens. All in all we felt it was a very successful day. I also had an opportunity to speak to the crowd for about 10 minutes after which we had people lined up two and three deep wanting more information.

CA Tax DayHearty thanks to Jim and fellow FairTax volunteers John Depue, Frank Wagener, Kenneth Smith and Maxine Rodowicz for working so hard to make the event happen!The FairTax In the Media

Bi-partisanship and the tax code – Shreveport Times

…Obama, Speaker John Boehner and others all the way down on both sides of the aisle give the same talking points on the need for comprehensive tax reform. “We need to close loopholes.” “We need to make it more transparent.” “We need to simplify.”..

The Fair Tax Act is a bill currently in Congress that would do just that…

Well, if this is so good, why hasn’t Congress done it?

This goes back to the bi-partisan effort I started with. Those in leadership have too much invested in the tax code to let it go easily. They may bicker over many things, but even when their side is not in power, they can’t let it go hoping that they will have their turn again. The only two classes that truly exist are the political elite, and the rest of us. This is why “we the people” no matter our other issues or disagreements, must be non-partisan on this, and force them to do what is right.

Isn’t it time you got involved?

Town hall meeting focuses on tax reform – WHIZ News

A town hall meeting proposed the idea that the current tax system is flawed and a tax reform is needed.

The forum debated the difference between a flat tax and a fair tax. Speakers on both sides agreed that the forum will hopefully act as a way to change the tax system.

“This is a replacement for the system that’s already there, the federal income tax. What we propose to do under the fair tax is eliminate the income tax and eliminate the IRS and replace it with one simple retail sales tax,” said Steve Curtis, State Director with Americans for Fair Tax Ohio…

Curtis adds, “Our objective is to help people understand just how bad of a situation we’re in and give them an alternative.”

Understanding The FairTax Webinar

With April’s Additional Topic: The effect on seniors and retired people.

When: Thursday, April 24, 2014

Time: 8 pm Eastern, 7 pm Central, 6 pm Mountain, 5 pmPacific

Where: At your personal computer, anywhere!

Why: To provide a LIVE, interactive forum for people who cannot get to local meetings to learn about the FairTax and to present special topics that are frequently misunderstood or not generally discussed.

Who: Join Marc Manieri, Webinar Producer & Host from Orlando, Florida. Our webinars are vital to educating honest tax payers. We help build the knowledge base of those on the front lines as well as those wanting to know what the FairTax is about.

Join: To participate, register here and watch for the confirmation email. For more information contact Larry Walters at repeal_16@earthlink.net

RELATED STORY: IRS Caught in Bed With DOJ: New Documents Reveal Lerner Conspired with DOJ to Prosecute Conservative Groups

Retailers Head to Energy Boom States

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Here’s an example of how the benefits of the shale energy boom radiate beyond the oil and gas industry. The Wall Street Journal reports that Home Depot opened only one store [subscription required] this past fiscal year, and it was in Minot, North Dakota, near the Bakken shale formation.

Home Depot went there because energy production is driving economic growth:

“If you had said to me seven years ago, you’ll be opening a store in Minot, North Dakota, I would have asked, Why?” Chief Executive Frank Blake said in an interview. “One of the great stories of the U.S. is the shale oil development, and it’s happening in areas where we don’t have a lot of stores now.”

Michael Glazer, CEO of Stage Stores, wishes his company had stores in North Dakota right now. He told the newspaper:

There’s a correlation between the energy boom and county employment rates. And wherever energy comes in, jobs follow and people spend more at our stores.

Look at North Dakota. Local writer Rob Port of SayAnythingBlog.com reports that because of the oil boom, North Dakota’s unemployment rate is 2.6%, while the nation’s unemployment rate stands at 6.7%.

He also posted a map showing that every county in the state saw at least 14% per-capital personal income growth from 2007-2012.

SayAnythingBlog_governingpersonalincomes_map

For a larger view click on the map.

It’s no wonder Home Depot has expanded there.

Other major retailers see these trends as well:

Home Depot is among a number of retailers including Wal-Mart Stores Inc. and GameStop Corp. targeting oil and gas towns in North Dakota, Texas and Louisiana, in an otherwise dour environment for retail real estate.

Natural Gas Intelligence reports that cities in or near energy-rich areas are growing the fastest, according to a Census Department study:

Of the nation’s 10 fastest-growing metropolitan statistical areas, six were within or near the Great Plains and near to some of the country’s largest oil and gas fields, including Odessa, TX; Midland, TX; Fargo, ND; Bismarck, ND; Casper, WY and Austin-Round Rock, TX.

The same was true of micropolitan statistical areas, those ranging in size from 10,000 to 50,000 people, near oil and gas development. Seven of the fastest growing micro-areas were located in or near the Great Plains, with Williston, ND, ranked first in growth, followed by Dickinson, ND, and Andrews, TX.

Jobs and economic growth created by increased domestic energy production are drawing people to these cities. Businesses follow.

States that aren’t sitting on top of energy deposits also benefit from the shale energy boom, according to a 2012 report by IHS for the U.S. Chamber’s Institute for 21st Century Energy. For example:

Among non-producing states, fabricated metal manufacturing in Illinois, software and information technology in Massachusetts, and financial services and insurance in Connecticut are examples of central players in the US unconventional oil and gas supply chain.

The report noted, “By 2035, unconventional oil and gas will add almost $475 billion dollars to the economies of the lower 48 US states.”

As seen by what’s happening in North Dakota, this growth will also ripple outward into the broader economy.

Regulation Nation: Federal Bureaucracy is as Busy as Ever

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The shale energy boom may be taking place in North Dakota, Texas, Pennsylvania, and elsewhere. However, the Wall Street Journal editorial board notes that a less economically-helpful boom is happening in Washington, DC:

Washington set a new record in 2013 by issuing final rules consuming 26,417 pages in the Federal Register. While plenty of government employees deserve credit for this milestone, leadership matters. And by this measure President Obama has never been surpassed in the Oval Office.

The latest rule-making tally comes from the Competitive Enterprise Institute’s Wayne Crews, who on April 29 will publish his annual review of federal regulation in “Ten Thousand Commandments.” This is important work because politicians and the media treat regulation as a largely cost-free public good. Mr. Crews knows better.

Congress may be mired in gridlock, but the federal bureaucracy is busier than ever. In 2013 the Federal Register contained 3,659 “final” rules, which means they now must be obeyed, and 2,594 proposed rules on their way to becoming orders from political headquarters.

The Federal Register finished 2013 at 79,311 pages, the fourth highest total in history. That didn’t match President Obama’s 2010 all-time record of 81,405 pages. But Mr. Obama can console himself by noting that of the five highest Federal Register page counts, four have occurred on his watch. The other was 79,435 pages under President George W. Bush in 2008.

And the feds aren’t letting up. Mr. Crews reports that there are another 3,305 regulations moving through the pipeline on their way to being imposed. One hundred and ninety-one of those are “economically significant” rules, which are defined as having costs of at least $100 million a year. Keep in mind that the feds routinely low-ball their cost estimates so the public will continue to think regulation is free.

Federal agencies are hard at work writing more rules to implement Dodd-Frank, Obamacare, and environmental laws. “By far their greatest and most tragic cost has been slower economic growth, which has meant fewer jobs, lower incomes and diminished economic possibilities for tens of millions of Americans,” writes the editorial.

Our modern economy needs a revamped, transparent, balanced, and accountable regulatory system so businesses have more certainty to invest and hire workers.

My colleague Sheryll Poe put together this infographic to summarize the editorial.

[via memeorandum]

 

Rubio: On Tax Day 2014

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U.S. Senator Marco Rubio (R-FL) on Tax Day 2014 notes, “Tax reform is critical. And it’s not just critical to take the hassle out of our lives. It’s critical for the economic future of our country. Our economy is stagnant. It’s not growing fast enough. It’s not creating enough jobs. And by the way, about 40% of the jobs that it is creating pays $16 an hour or less.”

Is reform of the tax code needed or a scraping of the entire income tax? Many are calling for either a flat tax or FairTax system.

To mark Tax Day 2014, Rubio sent out the below video addressing constituent concerns about the broken tax code system. Rubio points to the tax codes stifling effect on the economy as proof of the need for tax reform:

[youtube]http://youtu.be/RteG2ceXtk8[/youtube]

In the video, Rubio outlines various disconcerting facts about the increasingly complicated tax code and the unnecessary burdens it places on taxpayers:

  1. It takes 13 hours for the average taxpayer to file their taxes, including record keeping, planning, as well as filling out forms.
  2. Last year, Americans spent 6.1 billion hours and $168 billion complying with all their tax filing requirements.
  3. The tax code, rules and regulations now totals more than 73,000 pages, as opposed to 400 pages when it was created in 1913.
  4. Americans will pay $3 trillion in federal taxes and $1.5 trillion in state and local taxes this year.
  5. Americans must work 111 days this year to pay their federal, state and local taxes.

Rubio:

“One of the things holding back our economy is a broken tax code. We have a tax code, for example, that punishes companies for investing their profits back into their businesses, to hire more people, to give their workers raises, to expand their operations. We have a tax code that actually encourages our employers to take their business overseas. Those are some of the things we have to fix as well. So I agree with you wholeheartedly, and that’s why I hope this November we’ll have new leadership here in Washington that will move on this important item.”

RELATED STORY: Obama has Proposed 442 Tax Hikes Since Taking Office

TAX DAY APRIL 15, 2014: We Will Not Yield

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My father was a federal civilian employee who voraciously adhered to his responsibilities under the federal Hatch Act. At that time, the Hatch Act prohibited federal employees from any partisan political activity, and violation penalties were severe including possible termination of employment.

In 1981, I became a federal employee and like my father before me, there was just something sacred about respecting and abiding by the Hatch Act. If for nothing else, it was the law.

The Hatch Act has stood for 75 years, and although major modifications were made in 2013, the prohibitions against partisan political activity during the workday and on federal property still stand.

And while most federal employees respect and abide by the tenants of the Act, IRS employees have chosen to ignore federal law.

On April 9, 2014, the U.S. Office of Special Counsel issued a press release outlining what can only described as outrageous violations of the Hatch Act by IRS employees and entire offices during the 2012 presidential election. The Counsel found:

  • An IRS customer service representative, while fielding questions on the IRS customer service help line, urged taxpayers to reelect a presidential candidate in 2012 by repeatedly reciting a chant based on the spelling of that candidates last name.
  • An IRS tax advisory specialist in Kentucky told a taxpayer she was assisting, that she was against a specific political party because “they are trying to cap my pension…and they’re going to take women back 40 years.” She then added, “My mom always said, “If you vote [she named the party], the rich are going to get richer and the poor are going to get poorer.”
  • Employees in the Dallas, TX IRS Taxpayer Assistance Center wore partisan political stickers, buttons and clothing to work, and displayed partisan screensavers on their IRS computers.

Are we supposed to believe that the IRS, the same federal agency that targeted conservative non-profits, will conduct non-biased, non-retaliatory tax examinations and audits of American taxpayers?

Especially when our nation’s Attorney General refuses to appoint a special prosecutor to examine the allegations and evidence against former IRS senior manager Lois Lerner, our President preemptively declared that there is not even a“smidgen of corruption” at the IRS, and the minority leader of the Congressional Oversight Committee investigating Ms. Lerner apparently corroborated with Lerner and her team!

Of course, Congress, can solve this problem with the immediate enactment of HR 25/S 122, the FairTax Act of 2013. This is why another announcement this week was so perplexing.

Senator John Cornyn (TX) rightly announced that, “Americans should never face persecution from their government for exercising their constitutional rights.” We couldn’t agree more Senator. But the Senator went on to say he introduced new legislation to “help ensure that no one is targeted by the IRS for their political or religious beliefs and will work to repair the serious breach of faith caused by the IRS’ actions.”

Congress has had 100 years to “repair” the IRS and the income tax code and they have failed on all counts. It is not repairable – it can’t be fixed! As a co-sponsor of S. 122, we would hope the good Senator knows the FairTax defunds and disbands the IRS in its’ entirety.

With the FairTax®, the IRS is gone. No more persecution, no more targeting, no more invasion of privacy and peering into every aspect of one’s personal, financial life.

Next week is yet another Tax Day. To many, this marks another year in which the FairTax was not enacted.

In times like these, I am reminded of Sir Winston Churchill who said to his alma mater, the Harrow School,

“Never give in, never give in, never, never, never, never-in nothing, great or small, large or petty – never give in except to convictions of honour and good sense. Never yield to force; never yield to the apparently overwhelming might of the enemy. We stood all alone a year ago, and to many countries it seemed that our account was closed, we were finished. All this tradition of ours, our songs, our School history, this part of the history of this country, were gone and finished and liquidated. Very different is the mood today. Britain, other nations thought, had drawn a sponge across her slate. But instead our country stood in the gap. There was no flinching and no thought of giving in; and by what seemed almost a miracle to those outside these Islands, though we ourselves never doubted it, we now find ourselves in a position where I say that we can be sure that we have only to persevere to conquer.”

Ladies and gentlemen, our cause is great and our convictions clear. We will not yield to the force of opposition and we are not alone in our desire to have a system of taxation that is fair and free of threats.

We are a force and we will never give in, never give up and never go away. We are the FairTax and someday, we will see April 15 become just another spring day.

Higher Ed: Bubble, Toil and Trouble by SANDY IKEDA

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Interest rates have been in the news again so for this week’s column I thought I’d do a little back-of-the-envelope economic analysis.

What Does this Sound Like to You?

The government artificially lowers interest rates for borrowers who want to invest in a particular sector of the economy. Other things equal, that will increase the demand for assets in that sector as borrowers are misled into believing they will be worth more in the future than they actually will be. The current price of those assets will climb as will the quantity supplied (i.e., the demand curve slides up the supply curve). Borrowers will then clamor to keep borrowing rates low (or even lower) so they can afford to complete their investments, although that would also attract new borrowers. So pressure on demand continues and investment costs soar as asset prices and output keep rising.

Now, because government has kept interest rates artificially low—below the rate that would accurately reflect the actual supply and demand in the loan market—there is too much investment in those assets in relation to the actual demand for it. That means when investors try to sell their assets they will find no market for them. At that point the bubble bursts, bringing complementary sectors down with it.

If the Shoe Fits

If you think this describes the housing market from 2001 to 2006, you’d be right. Just substitute housing/houses for asset/assets and “financial sector” for “complementary sectors” in the above narrative and you would get an accurate (though incomplete) summary of the recent housing boom and bust. (For an excellent discussion of this episode, see Peter Boettke and Steven Horwitz’s essay.)

But you could substitute “higher education” into the story as well.

As an author of the Economix blog over at The New York Times reports, data from the Bureau of Labor Statistics show that “college tuition and fees today are 559 percent of their cost in 1985. In other words, they have nearly sextupled (while consumer prices have roughly doubled).” There’s a nice diagram in the post illustrating this. Tuition has been far outpacing price increases over time for consumer items, medical care, and gasoline.

Author Catherine Rampell argues, however, that “the main cause of tuition growth has been huge state funding cuts.” As an employee of a state university I can confirm that these cutbacks have indeed been taking place over the past couple of decades. The author offers some evidence to support her claim, but if you look closely, the dramatic rise in tuition still seems to outstrip the relative fall in state subsidies.

More importantly, if what she argues is true, why is it that college enrollment over the same period has been rising?

In basic economic terms, she is arguing that because the colleges are bearing more of the actual costs, the supply curve for college education has been shifting upward and to the left—causing tuition to rise and enrollment to fall. But the evidence points to a rightward shifting demand curve (like the narrative I sketched at the outset), which accounts for both the higher tuition and higher enrollment.

According to the National Center for Education Statistics,

Enrollment in degree-granting institutions increased by 11 percent between 1990 and 2000. Between 2000 and 2010, enrollment increased 37 percent, from 15.3 million to 21.0 million.

Between 2000 and 2010, the number of 18- to 24-year-olds increased from 27.3 million to 30.7 million, an increase of 12 percent, and the percentage of 18- to 24-year-olds enrolled in college rose from 35 percent in 2000 to 41 percent in 2010.

The Stafford loan program, which subsidizes student loans, began in 1988.

If Rampell is right, then shouldn’t enrollment be falling? Instead it is rising disproportionately. Just as the housing bust left tracts of houses unused, a higher-education bust would create a small army of unemployed young people.

An Act of Independence?

But just as overbuilt housing can be used for some lower-valued purpose than it was intended for, investment in education—which is sometimes more accurately described as “spending on a credential”—often goes “underemployed.”  So growing underemployment of college grads is something we should keep an eye out for.

According to The Huffington Post, “half of recent grads are working jobs that don’t require a degree, according to research from the Center for College Affordability and Productivity, released in January.”

The same article notes, “In 2000, before the economy fell into a recession, the share of recent college graduates who were either jobless or underemployed hit an 11 year low of 41 percent, according to the Associated Press.”

Now, as an article from The Washington Post makes clear, that’s not necessarily a bad thing: Some jobs don’t require a specific degree. Also, it’s unrealistic in a dynamic economy to expect the major you choose when you’re 20 to match what your comparative advantage will be later in life.

Still, it’s probably true that many young people who would otherwise get the training they need for productive jobs from trade schools and community colleges are applying to and getting into four-year colleges, as the lower rates tend to offer a higher subsidy to the latter. (Example: The savings from a lower rate on a $50,000 liberal arts college loan is greater than the savings on a $10,000 loan for community college.)

This week Congress takes a holiday to celebrate Independence Day. One of the things they’re leaving undone is negotiating a measure to keep the rates on Stafford loans from rising from 3.4 percent to 6.8 percent. Given the very real possibility of a bubble in higher education, that may actually be a blessing.

The first step to avoiding a huge bust, though some kind of correction seems to be inevitable, would be to let the Stafford-loan rates rise to reflect the realities of the loan market. That could mean a significant break in the vicious boom-bust cycle in higher education.  The question is, does Congress have the will to do nothing?

ABOUT SANDY IKEDA

Sandy Ikeda is an associate professor of economics at Purchase College, SUNY, and the author of The Dynamics of the Mixed Economy: Toward a Theory of Interventionism. He will be speaking at the FEE summer seminars “People Aren’t Pawns” and “Are Markets Just?”

An Open Letter to Tallahassee: The FPSC has NO Jurisdiction over Health, Safety and Privacy

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AN OPEN LETTER TO GOVERNOR SCOTT, FLORIDA STATE SURGEON GENERAL JOHN ARMSTRONG, FLORIDA ATTORNEY GENERAL PAM BONDI, AND FLORIDA STATE SENATORS AND REPRESENTATIVES:

Please STOP forwarding the e-mails and letters you get from Florida residents pertaining to any health, safety or privacy issues for smart meters to the Florida Public Service Commission (FPSC) for resolution. It is pointless. The FPSC has determined in ORDER NO. PSC-14-0146-FOF-EI, issued on April 1, 2014 (was this an April fools joke?), Docket NO. 130223-EI the following (page 10):

“Since such health, safety or privacy concerns have not yet been addressed by the Commission the Protestors contend this is the appropriate venue to raise these issues which the Protestors believe are within the Commission’s jurisdiction. However, none of the Commission’s authorizing statutes confers upon it jurisdiction over personal health, safety or privacy issues raised by the Protestors. Nor is the Commission authorized to enforce these extra-jurisdictional issues, which are the purview of the other agencies.” (Emphasis added)

The bottom line is the Florida Public Service Commission has mandated that all 4.5 million customers must accept Florida Power & Light Company’s (FPL’s) smart meter or pay an extortion fee, but apparently they have NO jurisdiction to ensure health, safety or privacy for that product.

When you forward the letters you receive from residents to the FPSC, they turn around and send them a letter stating that there is a proceeding being protested by citizens on this matter and hearings will be held later this year. The FPSC gives them a link to the docket page. The residents go to the FPSC Docket page and find my e-mail and address (since I am one citizen with a protest filing pending on this docket) and the residents call or e-mail me.

Since the issues of health, safety and privacy raised in the petition have been denied by the FPSC, as they claim they have no jurisdiction, could you please do your job and tell the people of Florida directly that NO Florida government agency wants to take responsibility. Will you be brave and tell them yourself that

• our Florida State Constitution is null and void as it pertains to privacy rights in one’s own home or private property rights and that the utilities get to decide who owns the data taken from their homes and they are compelled to give it to the utility or they may alternatively pay a fine to keep it private?
• all issues of health, safety and privacy has been relegated to the Federal Government and are outside the jurisdiction of the Florida government (the republic is officially over)?

If this is not the case, I ask the Governor, Attorney General, State Surgeon General as well as each legislator (who has jurisdiction over the FPSC) – who in Florida’s government does have jurisdiction to ensure that Floridians health, safety and privacy are properly safeguarded from the FPSC Orders?

Here are some of the main issues:

HEALTH:

Issue 1: Many customers have alerted the FPSC that they have either medical conditions (sensitivities to RF radiation and electro-magnetic fields) or medical implants and devices for which their doctors have advised them to avoid exposure to RF radiation.

FPSC response – not my job. Take the meter or pay up to comply with doctor’s advice.

Issue 2: Many residents with or without prior sensitivities to RF radiation became ill when such smart meters were placed on their homes. When the device was removed, their good health was returned.
FPSC response – not my job. Take the meter or pay up to protect your health.

Issue 3: FCC guidelines and approval only cover acute short-term exposure to RF radiation. They do not test for or cover long-term chronic exposure or accumulated exposure to RF, nor do they consider any biological effects. You cannot turn a smart meter off to avoid exposure.

FPSC response – not my job.

Issue 4: The legislative branch gave the State Health Dept. jurisdiction over non-ionizing radiation in Statute 501.122 – Consumer protections.

FPSC response – no responsibility to coordinate with the Health Dept.

SAFETY:

Issue 1: Smart meters are installed on homes and businesses in places that are wide open and accessible to the general public. It is possible for any citizen to lean up directly against these meters. The FCC Grant of Equipment Authorization (OWS-NIC514) for the Silver Spring Network radio module (900 MHZ) for utility meters, that FP&L is using in their GE smart meter, states the following on its grant notes: “The antenna(s) used for the transmitter must be installed to provide a separation distance of at least 20cm from all persons and must not be co-located or operating in conjunction with any other antenna or transmitter.”
The vast majority of Florida citizens do not even know what a smart meter is or the fact that it contains two transmitters, one for the NAN and one for the HAN. They do not know to stay 20cm away. We also haven’t figured out how they can co-locate two transmitters.

FPSC response – not my job.

Issue 2: Smart meter installations have resulted in fires and damage to customer equipment and appliances.
FPSC response – not my job.

PRIVACY:

Issue: The smart meter contains a computer and storage and is taking detail measurements (4 hours today, 15 minutes in the future), which will be stored by the utility, and is available to all government agencies (Third Party Doctrine). Such data means surveillance of citizens in their homes and such data is NOT needed for billing. The FPSC is fully aware that each utility it regulates regards the ownership of such data differently.

FPSC response – not my job to develop privacy rules.

PROPERTY RIGHTS:

Issue 1: In 1988 under Order 18893, the FPSC, at FP&L’s request, transferred the ownership of the meter enclosure to the customer. They said that it was not part of the utility function and simply housed a meter. Therefore the customer must bear all the costs and burdens of ownership and maintain the meter enclosure. In 2010, the FPSC mandated the smart meter, which is really network management and communication equipment (that also contains a meter). Such equipment establishes a wireless neighborhood area network through the meter, performing more than measurement functions, on our homes. It violates the terms and conditions of Order No. 18893. Essentially customers now have the costs and burdens of ownership but no rights and privileges, such as refusal of equipment that does not satisfy the original terms.

FPSC response – we have the powers of police state. (That they do!).

Issue 2: Many Floridians own rental properties and do not wish this equipment placed on their buildings. If the electric is in their tenant’s name, FP&L claims they have no right to decide, the tenant gets to choose the equipment.

FPSC response – okay by me.

MULTI-FAMILY HOUSING:

Issue: If you live in a multi-family dwelling and have a bank of meters behind your bed, how do you opt out?

FPSC response – we can’t answer that question so we will continue to ignore it.

Please direct your staff to prepare answers for the above issues and answer the inquiries from residents directly. I have decided that since I can’t answer their questions, I am now advising all residents that call me to vote Independent in this next election. If we get rid of the corrupt establishment politicians and officials and vote for an independent, such as Adrian Wyllie for Governor, who appears to be devoted to the Constitution, then maybe we can get a Public Service Commission that understands that they have two stakeholders – the utilities and the customer.

The FairTax Means Freedom by Rep. Rob Woodall

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The Nobel Prize-winning economist, Milton Friedman, once said, “Sloth and lack of enterprise flourish when hard work and the taking of risks are not rewarded.”

While I believe this statement to be true, I am grateful it has never characterized the American spirit. Hard work and risk taking are precisely what built our great nation, and it is through these traits in Americans across the nation that we will once again have a thriving economy.

To unleash the tremendous resource that is the American worker, entrepreneur and innovator, we need only to align the tax code with our core principles. That is what excites me about the FairTax.

The FairTax means freedom. Those of us who are fighting so hard for it understand this. It is freedom from a burdensome, manipulative tax code that penalizes the very things we need to grow our economy. The FairTax means freedom for business owners and entrepreneurs to make decisions based on their own resources and vision, not a convoluted, punitive compilation of regulations.

It is no small thing that the FairTax also returns to Americans the freedom of anonymity. No federal bureaucracy should ever know as much about us as the IRS knows, particularly a federal bureaucracy as powerful as the IRS. Our Founders never intended this level of personal intrusion, and the FairTax is a giant step in the direction of personal liberty.

Any proposal that shifts the balance of power from Washington back to the people in such a significant way as the FairTax is certain to encounter political inertia.  From its inception, we have all experienced the pushback of those with a vested interest in the status quo.

The current tax code is by far the most effective tool for politicians to manipulate the behavior of Americans, and the FairTax removes this very powerful weapon from their arsenal. The fact that there is a strong resistance to it can neither surprise, nor discourage us.

The immense dedication of those in the FairTax community across the country is directly responsible for the consistent and significant progress we are seeing in Washington. Members of Congress become a co-sponsor of this bill because their constituents demand it, and that is exactly how it should be.

With 84 co-sponsors, the FairTax has become the most popular fundamental tax reform bill in Congress, and its support continues to grow. Your commitment has led to more FairTax supporters on the Ways & Means Committee than ever before and a committee hearing specifically on H.R. 25 for the first time in a decade.

As the Ways & Means Committee discusses tax reform, the FairTax emerges as a powerful voice in the conversation that is impossible to ignore, try as Washington special interests might. Its strength, however, is not found in bearing the seal of approval from the political establishment, but rather in who fuels the movement: the American people.

If we continue to convince more and more of our neighbors of the benefits of the FairTax, the call to action in Washington will one day overcome the loud voices calling for more of the same. Make no mistake—you all are leading that effort to change hearts and minds across America.

I cannot thank you enough for your commitment to our success and your conviction that our great nation deserves nothing less than the FairTax.

Congressman Rob Woodall represents the 7th district of Georgia and is the sponsor of HR 25.

EDITORS NOTE: The featured photo was taken by Gage Skidmore. This file is licensed under the Creative Commons Attribution-Share Alike 2.0 Generic license.

If you think expanding school choice is expensive –consider the alternative! by Jeff Spaulding

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President Obama has yet again omitted funding for the D.C. Opportunity Scholarship Program in his recently proposed 2015 education budget. Although his reasoning is likely more philosophical than financial, his decision makes analyzing the fiscal effects of opposing school choice worthwhile.

Data from the U.S. Department of Education (DOE) show that taxpayers are bearing additional costs for funding K-12 education as a result of the continued erosion in private school enrollment.

By the 2009-10 school year, the private school share of K-12 enrollment nationwide had dropped nearly three percentage points, down to 10 percent since its peak of 12.7 percent in the 1984-85 school year. The DOE currently projects that enrollment shift, if unabated, will continue—falling further, to 9.1 percent, in 2020.

Critically, public schools have had to fill that gap, causing a substantial net additional fiscal cost that is rarely acknowledged by public officials.

Looking only at 2009-10, if the private school share had held steady at the 1984-85 level, about 1.5 million fewer students would have been enrolled in public schools. With America’s per-student spending average of $10,652 in public schools in 2009-10, taxpayers would have saved $15.7 billion that year alone.

Taking a broader view, if the private school enrollment share had held steady at 12.7 percent from 1985 through 2010, spending on the K-12 public schools across the United States could have been as much as $222 billion less! Check out the chart below to see for yourself.

Just imagine what might have happened had a different set of policy options been pursued over the past 25 years. For example, a very limited and targeted school voucher program—phased in one cohort annually starting with kindergarten in 1986— likely would have been more than sufficient to maintain the 1985 private school enrollment share. At a theoretical voucher amount of half the public school average spending per pupil—awarded to just enough students each year to maintain a 12.7 percent private school enrollment share—taxpayers could have saved as much as $111 billion, through 2010, by “spending” on a new school voucher program.

Phasing in by cohort is merely a technical way of describing a voucher program that is expanded sequentially starting with a first group of incoming kindergarten students and then allowing all subsequent new classes of kindergarten students to be eligible. Thus, in year two of the program, both kindergarten and first grade students would be eligible. In year three, eligibility expands to students in kindergarten through second grade, and so on. Such a strategy would have served to moderate the voucher program’s growth and align its expansion more closely with the erosion rate in private school enrollment. Additionally, a phase-in by cohort could have been overlaid with other criteria, such as income limits or geographic boundaries, to control eligibility even more tightly if so desired.

In fairness, it would be rather difficult to design a nationwide school voucher program in such a restricted way that it would offset only the slow erosion in private school enrollment share (approximately 0.1 percent or 50,000 students per year). Because each new cohort is about four million students, any such program, even if restricted and phased in, likely would attract more participants than required just to offset the erosion rate. The upside is, if such a voucher program caused the private school enrollment rate to rise, the savings would be even more.

What has actually happened over this period of time? A sporadic expansion of school choice options on a state-by-state basis has served as a form of phase-in. Unfortunately, its pace has, thus far, been far too slow to fully offset the erosion in private school enrollment.

There’s no objectively “right” ratio for public school versus private school enrollment, but from a purely fiscal perspective, the larger the private school share the lower the public cost. For the ratio to return to somewhere near its 1985 level, the growth of school choice across the country will need to be accelerated by state lawmakers—because the president wants no part of it.

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