The Hidden Tax of the Regulatory State

Thursday, May 30th, 2013 and is filed under Blog, Economy, Taxes

Many of us in the Tea Party have focused intensely on the cost of big government to the federal budget.  Undoubtedly, this cost will be born directly by future taxpayers in the form of more taxes, higher interest payments on debt, and less economic growth.  While we must continue hammering home this point, we must also understand that many Americans still fail to connect the dots between government spending and their own wellbeing.  They still fail to realize how more government spending affects their lives.

What we need to focus on in the coming months is the cost of big government to the broader economy in the form of less jobs, lower income, and more expensive products and services.  As an example, I like to point out that although the EPA only costs us about $8 billion in operational costs, the regulations that are promulgated by this agency cost the economy untold hundreds of billions per year.  Hence, while advocating for less spending in general we must punctuate that message with specific proposals to reduce the burden of large government in a way that will resonate with the public.

The Competitive Enterprise Institute amplified this point when they published their annual report, Ten Thousand Commandments, which unpacks the size, scope, and cost of the federal regulatory behemoth.  Here are some of the key takeaways:

  • Total costs for Americans to comply with federal regulations reached $1.806 trillion in 2012. For the first time, this amounts to more than half of total federal spending. It is more than the GDPs of Canada or Mexico. […]
  • Regulatory costs amount to $14,678 per family – 23 percent of the average household income of $63,685 and 30 percent of the expenditure budget of $49,705 and more than receipts from corporate and personal income taxes combined.
  • Combined with $3.53 trillion in federal spending, Washington’s share of the economy now reaches 34.4 percent. […]
  • The five most active rule-producing agencies—the Departments of the Treasury, Commerce, the Interior, Agriculture, and Transportation—account for1,730 rules, or 43 percent of all rules in the Unified Agenda pipeline.
  • The Environmental Protection Agency (EPA), formerly consistently in the top five, is now sixth, but adding its 223rules brings the total from the top six rule making agencies to 1,953 rules, or48 percent of all federal rules.
  • Finalized EPA regulations were up by 44percent in Obama’s first term.

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The Big Amnesty/ Social Security Lie

Monday, May 13th, 2013 and is filed under Blog, Immigration, Taxes

It looks like we’ve discovered the panacea for all of our economic and social ills.  We’ve found the solution to the entitlement crisis as well.  We’re going to find the poorest countries in the world and import as many of their people as possible within a short period of time.  That way we will have millions of people paying into Social Security, purveying the “trust fund” with endless bounty.  This is what passes for sane analysis from the Social Security Administration’s chief actuary.

In an effort to buttress the Democrat Voting Act of 2013 aka the gang’s amnesty bill, Stephen Goss, Social Security’s independent chief actuary, released an analysis last week opining that amnesty will solve the Social Security deficit and *prevent*future waves of illegal immigration.  Goss finds that by 2024, this bill will have created 3.22 million jobs, and grow GDP by 1.63%.  With regards to Social Security, Goss concluded, “overall, we anticipate that the net effect of this bill on the long-range OASDI actuarial balance will be positive.”

Wow – why didn’t we think of importing mass poverty to save Social Security before?  Oh wait…that’s exactly what we’ve been doing for the past few decades.

This analysis was requested by Marco Rubio and is being bandied about by the open-borders elements on the right.  The irony is that Goss’s preposterous assertion is predicated on two long-standing left-wing deceptions, both of which have long been rejected by libertarians who are now pushing amnesty.

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The Madisonian, Issue #40

Tuesday, May 7th, 2013 and is filed under Blog, Debt, Immigration, Issues, Taxes

For those of you not getting The Madisonian, go sign up for it at www.MadisonProject.com.

Here’s Issue #40 (giving you a glimpse of what you are missing every week Congress is in session)

The Madisonian, Issue #40

Online Sales Tax: After a number of Republicans voted to invoke cloture on the online sales tax bill (S.743), this bill is expected to pass with a simple majority vote on Monday.  To make matters worse, supporters of the bill are offering a manager’s amendment which will provide a new definition for “state” that allows every tribal organization to force businesses in every state to pay sales tax too.  There are 565 federally- recognized tribal organizations.  This means that every business will now have to add 565 tribal tax systems to their system when collecting sales taxes for online purchases.

Conservatives must work to quickly circulate a letter in the House invoking the Hastert Rule against this massive tax increase.  We must make it clear that this tax increase is opposed by the majority of the House Republican Conference, and should not be brought to the floor any time during this session.

Debt Ceiling In January, Congress voted to suspend the debt ceiling ($16.394 trillion, at the time) until May 18.  However, given that the Treasury has the ability to shift payments and employ “extraordinary measures,” that de facto debt ceiling will not be reached until the end of the summer or early fall.  Meanwhile the gross debt stands at roughly $16.8 trillion.  In preparation for the fight over raising the debt ceiling yet again, GOP leaders have finally caved to conservative demands to pass the Full Faith and Credit Act, H.R. 807.  This bill will force the Treasury to prioritize payments for interest on the debt and social security in the event that the debt ceiling is reached.  The bill will come to the floor on Wednesday.

Conservatives have long advocated that we take default off the table so we can fight for transformational change while refusing to raise the debt ceiling without concessions from the Democrats.  There is more than enough revenue coming in to the Treasury to pay the vital bills.

Conservative concerns:

  • A shell game: Leadership is not bringing this bill to the floor because they have undergone a cathartic change and are suddenly willing to fight the debt limit increase.  This is just a bone being thrown to conservatives in return for their agreement to vote for the January debt limit suspension and the CR that funded Obamacare in March.
  • De facto Debt Increase:  Unlike the original version of the Full Faith and Credit Act sponsored by Rep. Tom McClintcok (R-CA), this iteration was dramatically altered by the Ways and Means Committee.  The original bill would have prohibited any new issuance of debt, forcing the Treasury to use only the incoming tax revenue (which covers about 65% of outlays) to prioritize interest payments.  This version would allow the Treasury to issue more debt in order to cover interest payments and Social Security interest expenditures.  This means that the tax revenue can be used to pay for almost all other functions of government, while using new debt to pay for the priorities.  This is a debt limit increase.

Immigration – Just two weeks after releasing the 844-page amnesty bill (S.744), which was written behind closed doors, the Senate Judiciary Committee will begin a marathon markup of the bill this Thursday.  The Senate Homeland Security Committee will also hold a hearing on the border security aspects (or lack thereof) of the bill.  In addition to forcing this super-complex legislation down the throats of Republican members so quickly, the drafters of the bill plan to introduce a 350-page managers’ amendment.  Taken as a whole, Republican members on the committee, most of whom were shut out of the entire process, are flummoxed and struggling to understand the ramification of this bill, let alone any new amendments.  For a detailed critique of how this bill will break our immigration system for years to come, please read this analysis by Daniel Horowitz over at the Madison Project.

Meanwhile, conservatives are now getting a handle on how many immigrants would be brought in under this bill.  According to Senator Sessions, this bill would bring in 32.7 million immigrants over the next 10 years, not including the 25 million new guest workers.  This is on top of our current record levels of between 1 and 1.1 million new green cards annually.  The bill will essentially bring in 2 million new immigrants every year. Also, the Heritage Foundation is published a study today pegs the price tag for amnesty at $6.3 trillion when all the welfare costs associated with such a low-skilled population are factored in.

Outlook

After spending two weeks denying the flaws in the bill as laid out by conservatives, Marco Rubio is finally admitting that the bill should be changed.  However, here’s how we see this playing out.  Republicans will offer some good amendments –both in committee and on the floor – to strengthen the border triggers and limit the amnesties.  Undoubtedly, Senator Rubio and most of the Republicans (and even some Democrats) will support those amendments, knowing that they will be voted down.  Then, after feigning concern for our security with their show votes, these senators will ultimately vote for the final bill.

Ultimately, it’s hard to see how this bill, no matter how odious the final product, will fail to get 60 votes on the floor.  Almost every Democrat will vote for it along with the GOP gang members.  There is very little margin for error.

The real fight will commence in the House.  There is a parallel Gang of 8 in the House that is working on a very similar bill.  They will add in one or two shiny objects to attract more Republican votes, but from what I’ve seen of the rough draft, this bill will be very similar to the Schumer/Rubio amnesty.  Conservatives must work closely with the good members on the Judiciary and Homeland Security committees in an effort to block any mass amnesty bill, while focusing on national security, enforcement, and targeted legal immigration reforms.

Ancillary issues this week

Here is a list of some of the smaller issues that will be considered in the House under suspension, along with the daily schedule for both the House and the Senate.

 

Stay informed every day at www.MadisonProject.com

 

 

21 Republicans Vote for Unconstitutional Interstate Online Sales Tax

Tuesday, May 7th, 2013 and is filed under Blog, News, Taxes

Yesterday, 21 Republicans helped secure passage of the Orwellian-named Marketplace Fairness Act.  The bill would allow states to join together in a contract to force online retailers who earn more than $1 million in annual revenue to collect sales taxes on behalf of all 50 states based on the location of the shipping address.

In an effort to rectify what proponents see as an unfair tax advantage over brick and mortar stores, this bill will create a tendentious tax scheme for large online retailers with stores in multiple states, at the expense of small firms who will be encumbered with collecting taxes for almost 10,000 distinct tax jurisdictions.  The bill will also help grow government all over the country, hurt low-tax states, impose taxation without representation, and impede the freest venue of commerce in the world.

Here are the 21 Republicans:

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Paul Ryan’s Busy Week

Thursday, May 2nd, 2013 and is filed under Blog, Family Values, Immigration, News, Taxes

Here are the rhetorical accomplishments this week of one of the biggest “stars” in GOP politics.

Joining in mass amnesty with a radical Democrat

On Monday, Paul Ryan joined Luis Gutierrez at a rally in Chicago to promote immigration reform.

“A sweeping immigration bill that would provide a path to legalization for millions of illegal immigrants was introduced in the U.S. Senate last week,” WBEZ reporter Alex Keefe notes. “Gutierrez said he and Ryan are in the process of drafting a House bill.”

According to Keefe, Ryan “stressed that changing the “broken” immigration system goes along with quintessentially Republican ideals. He pointed to his own family’s immigration from Ireland during the Great Famine.”

Promoting Gay Adoptions

“I do believe that if there are children who are orphans who do not have a loving person or couple – I think if a person wants to love and raise a child, they ought to be able to do that. Period. I would vote that way. I do believe marriage is between a man and a woman; we just respectfully disagree on that issue,” Ryan said.

It’s funny because Ryan believes that children who were brought here illegally “of no fault of their own” should be given citizenship and welfare.  What about the children who are forced to grow up in a licentious, dysfunctional home of no fault of their own?

Online Sales Tax

Paul Ryan now supports the concept of a online sales tax.  Aside for some technicalities of the current bill, he has no problems with raising taxes and instituting taxation without representation across state lines.

Folks, we’re in a world of hurt.  When do you ever have a prominent Democrat come out one week and evolve on a major issue in favor of conservatives, support massive tax cuts, and join with conservatives on a major right-wing initiative?

There is a reason why we are losing this game.  We have no men on the field.

Internet Sales Tax is Interstate Power Grab

Tuesday, April 23rd, 2013 and is filed under Blog, Taxes

The Commerce Clause of the Constitution has been used as a garbage can of left-wing jurisprudence to grant the federal government infinite power over the the citizenry for years.  Ironically, the original intent of the Commerce Clause was to serve as a check on state power grabs across state lines, not as a new power for the Feds to wield over the people.

Here’s what James Madison had to say about the Commerce Clause in a letter to Joseph C. Cabell in 1829:

For a like reason, I made no reference to the “power to regulate commerce among the several States.” I always foresaw that difficulties might be started in relation to that power which could not be fully explained without recurring to views of it, which, however just, might give birth to specious though unsound objections. Being in the same terms with the power over foreign commerce, the same extent, if taken literally, would belong to it. Yet it is very certain that it grew out of the abuse of the power by the importing States in taxing the non-importing, and was intended as a negative and preventive provision against injustice among the States themselves, rather than as a power to be used for the positive purposes of the General Government, in which alone, however, the remedial power could be lodged.

Well, in the case of the internet sales tax, Congress finally has the opportunity to exercise its power under the Commerce clause to prevent injustice among the states.  Instead there is a bipartisan consensus in the Senate to allow states to tax internet sales across state lines.

Yesterday, 74 senators, including 27 Republicans, voted to proceed with debate on the so-called Marketplace Fairness Act (S.743).  The bill would essentially allow states to join together in a tax cartel to force online retailers to collect sales taxes on behalf of all 50 states based on the location of the shipping address.   Although the bill never went through regular order and a markup in the Finance Committee, Harry Reid is fast-tracking this bill through the Senate.

Here are my continued concerns about the entire premise of the interstate cartel:

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Dems Vote Down Bill to Ban Tax Delinquents from Federal Jobs

Wednesday, April 17th, 2013 and is filed under Blog, Issues, News, Taxes

Is there no degree of commonsense that Democrats will adhere to?

The media is pining for bipartisan cooperation in Washington.  Well, on Monday, the House brought a bill to the floor that should have passed unanimously.  On Tax Day, Rep. Jasson Chaffetz (R-UT) wanted to draw attention to the fact that there are some federal employees that are delinquent on their taxes.  He brought the Federal Employee Tax Accountability Act of 2013 (H.R. 249) to the floor under suspension, requiring a 2/3ds threshold to pass.  All this bill would do is make any person who has a seriously delinquent tax debt ineligible for federal employment or to continue serving as a federal employee.  Chaffetz explained the problem in his floor remarks:

In 2011–the most recent year for which the IRS data is available–they tell us that 107,658 civilian Federal employees owed more than $1 billion. Now, the statistics say they have a greater compliance than the rest of the public. But let’s remember, when you’re unemployed, you’re probably going to have a hard time complying. Employment for those that are Federal workers is 100 percent. They have a job. They have a responsibility to pay their taxes.

It was reasonable to assume that he could bring this bill up even under suspension.  How could it fail to garner 2/3ds support?  Well, it did.  It got 250 yea votes and 159 no votes, but fell shy of the 2/3ds supermajorty.  152 Dems, or 75% of the caucus voted it down.

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Taxes, Guns, and Chuck Schumer as GOP Leader

Wednesday, April 10th, 2013 and is filed under Blog, Issues, News, Taxes

Until recently, taxes and guns were the two issues that served as the glue to bind together Republicans of all stripes.  They were the two issues that even feckless elected-Republicans could be counted on to hold the line and stand with conservatives.  But over the past few years, Obama and the Democrats have gotten Republicans to break their impervious opposition to tax increases by supporting “increased revenue” and closing “loopholes.”  Now they are doing the same thing with guns.

Democrats know that they have lost the policy debate on these two issues over the past two decades.  That’s why they will never directly push for sweeping tax hikes on everyone (at least not in a way people will notice) or for complete confiscation of guns.  Instead they are trying to cut around the edges in order to get Republicans on record as supporting some new “revenue increase” or a new gun law, in the hopes of reopening the door on those two issues for future concessions.

On the tax front, they have gotten many prominent Republicans to agree to the premise of closing “loopholes” for those who already pay 40% of the income tax (even after those  so-called loopholes are factored in).  They also got them to sign onto the Biden/McConnell tax increases.  The irony about these tax hikes is that in order to win the messaging war with Republicans, they must target only the very rich.  However, by only targeting the rich, the amount of revenue they raise is so insignificant that it defeats the original purpose of the tax hikes.

Or does it?

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Austerity Cuts vs. Real Entitlement Reform

Tuesday, April 9th, 2013 and is filed under Blog, Obamacare, Taxes

In his latest attempt to cajole Republicans into raising taxes, Obama has called for a budget plan that makes some cuts to Medicare providers and subjects Social Security payments to the chained CPI.  John Boehner was correct to reject this ploy of holding entitlement savings hostage for tax increases.  However, he has come close to negotiating such a deal in the past, and there are some GOP officials who are saying they would still agree to such a trade.  Lindsey Graham has already expressed encouragement over the proposal.

We must remember that even to the extent we would be willing to trade tax increases for something transformational, Obama’s proposal is not entitlement reform, and it certainly doesn’t represent something transformational.  It is a proposal of austerity cuts to the status quo.

The problem with entitlements is not limited to the budgetary cost to the federal government, although that is certainly a major concern.  The problem with our entitlements – in the case of Medicare and Medicaid – is the lack of choices, free market forces, and the inflationary cost of healthcare to the individual.  The problem with Social Security is the lack of private property rights, dreadful rate of return, lack of individual liberty, and hopeless dependency on government.  Limiting benefits to the chained CPI might be fine for the government option, but it should not replace policies that offer more choices.  Means-testing benefits might save money, but we must not forget that Social Security is already means-tested, as its benefit formula is tendentious towards low-income earners relative to what they contribute to the program.

Consequently, any real entitlement reform must follow the principles of free markets, limited government, and individual liberty.  The budgetary problem will self-correct through any conservative reform.  We are all rightfully outraged that Obamacare will force us to purchase health insurance, but where is the outrage over the lack of choice and control over our own retirement and healthcare as seniors?  We don’t need European austerity measures if they will not accompany a pro-growth plan that encourages private ownership and choice in retirement security.

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Guns and Illegal Immigration: It’s Not Just About the Budget

Wednesday, April 3rd, 2013 and is filed under Blog, Debt, Economy, Immigration, News, Taxes

Conservatives must remember that although we have focused as a movement on budgetary issues and profligate spending, we are under assault on a number of other fronts.  I have noticed that there are a number of conservative in Congress who don’t care or know much about issues not directly related to the budget.  That is especially true on the issue of immigration.  The irony is that amnesty for illegal aliens and boundless low-skilled immigration will break our budget  quicker than any other policy initiative.  Yet, many conservatives in the House are either indifferent or downright supportive of  some of the amnesty proposals percolating through congress.  We have certainly seen this with some social issues as well.

Over the next few weeks, the focus in Congress will shift from the debt to issues to guns and illegal immigration.  We must stay engaged in all issues that relate to our liberties and sovereignty as a nation.  While some Tea Party and libertarian organizations have sat on the fence on some “non-economic” issues, the Heritage Foundation has continued to fight for all three legs of the Reagan stool.  If you read nothing else today on the web, I encourage you to take a look at two articles from Heritage’s Vice President, David Addington.  The first one, on immigration, cuts to the core of the duplicitous language that GOP and Democrats supporters of amnesty have been advancing:

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