Taxes, Debt, Spending

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West Virginia Senate Bill 237

 

Check out this key bill voted on by elected officials in West Virginia, check-in to the VoteSpotter app to see how your legislators voted, and comment below to share what you think!

 

Senate Bill 237, Repeal obsolete tax regulations: Passed 33 to 0 in the state Senate on February 15, 2017

 

To repeal certain tax related rules and regulations which are no longer authorized or are obsolete

 

Comment below to share what you think of West Virginia Senate Bill 237!

 

What’s in the Trump Budget?

 

President Trump released his budget proposal this week. As may be expected from someone who promised to shake up Washington, his spending plan outlines some big changes to federal spending.

 

One of the major differences between Trump and previous presidents involves entitlement programs. These are programs such as Medicaid and welfare that do not require an annual appropriation from Congress. Instead, if you qualify for them, you are entitled to receive them, and the federal government must find money to pay. Over the next ten years, the president’s budget lays out major alterations to these programs that could result in some big savings:

 

Medicaid – $880 billion. These reductions come from ending the expanded Medicaid matching rate for childless adults that was put in place by the Affordable Care Act. The budget also assumes that states will be given a capped amount of money per enrollee starting in 2020 (right now, states receive a matching rate for every person on Medicaid with no cap).

 

Food stamps – $191 billion. This assumes savings from allowing states to impose work requirements on Supplemental Nutrition Assistance Plan (SNAP) recipients.

 

TANF - $21.6 billion. The budget calls for reducing the Temporary Assistance for Needy Families (TANF) block grant to states as well as eliminating the contingency fund that states can access if there is more demand for the program.

 

For some programs, such as Medicaid, the spending projected by the Trump budget is a reduction in the future growth of the program. That is, there is a certain baseline spending growth that is assumed right now. Trump’s budget offers policy recommendations that would alter this baseline, reducing future growth. For other programs, such as SNAP, the Trump budget projects actual spending to be lower in 10 years (you can find more detailed charts on this here).

 

While entitlement programs would face reductions and many federal agencies would see their budgets reduced, there are a few increases built into the budget. The Department of Defense, the Department of Homeland Security, and the Department of Veterans’ Affairs would receive increases.

 

It should be remembered, however, that this budget proposal will not necessarily have any real effect. As we wrote in a previous blog post:

 

"Even after the president submits his budget, this does not mean that his spending plan will go into effect. Under the federal budget procedure, the president submits a budget, but Congress must pass its own budget resolution. The congressional budget resolution may or may not incorporate what the president wants to see happen. Each chamber passes its own resolution, and these two versions must be reconciled by the two chambers."

 

The president’s budget is more like a vision of where he thinks federal spending should proceed over the next decade. It does not mean that spending will actually follow along those lines. Congress has the power to determine funding levels for both discretionary programs (like defense) and make policy changes for entitlement programs (like Medicaid). Only action by the legislative branch can alter the direction of federal spending.

 

What do you think of the president’s budget proposal? Do you like that he has called for a reduction in these programs? Or do you see his priorities as being too draconian for the poor?

 

Michigan Senate Bill 98: Authorize Flint “promise zone” tax increment financing authority

 

Check out this key bill passed by elected officials in Michigan, check-in to the VoteSpotter app to see how your legislators voted, and comment below to share what you think!

 

Senate Bill 98, Authorize Flint “promise zone” tax increment financing authority: Passed 35 to 2 in the state Senate on May 16, 2017

 

To authorize a “low educational attainment promise zone” tax increment financing authority in Flint. These entities “capture" a portion of  increases in school property tax revenue and use the money to partially subsidize college tuition for local students.

 

Comment below to share what you think of Michigan Senate Bill 98!

 

Build the Wall or Shut the Government Down?

 

A wall that has not even been built could have been the obstacle that may have prevented many federal employees from going to work today.

 

The Trump Administration’s insistence that funding for a wall on the Mexican border be included in spending legislation was seen as a potential sticking point that prevents that legislation from passing Congress. If that had happened, it will mean portions of the federal government will not have funding to operate. A partial government shutdown would have been the result.

 

We have been in this position before. Clashes between the executive branch and legislative branch over federal spending bills have caused government shutdowns twice in the past. Those instances occurred when the two branches were controlled by different parties. Now, however, Republicans hold both the White House and Congress.

 

While Republicans control Congress, Democrats are playing a key role in this situation. Any spending legislation needs 60 votes to advance in the Senate. With only 52 Republicans, Senate Majority Leader McConnell needs to attract some Democratic votes for any bill that would avert a government shutdown.

 

Gaining those votes is proving difficult, as Democrats resist President Trump’s desire to have funding for a border wall (or at least funding to start on a wall) included. Some Democrats point to the president’s promise that Mexico would pay for a wall, wondering why the American taxpayers should pick up the tab for this. Others oppose the wall on principle.

 

The federal government is at this point because Congress and President Obama did not agree on long-term spending bills prior to the start of this fiscal year on October 1. Instead, they passed short-term funding measures. These measures end on April 28. Congress must either pass legislation that funds the federal government through the end of the fiscal year, or it must pass a continuing resolution that would provide short-term funding. If these things do not happen, then “non-essential” government personnel will not be reporting to work next Monday.

 

What do you think that Congress and the president should do? Should disputes over a border wall hold up funding for the rest of the federal government?

 

Trump Wants us to “Buy American, Hire American”

 

President Trump has signed an executive order that is aimed at increasing the hiring of U.S. workers and ensuring that government agencies buy U.S. goods. Called “Buy American, Hire American,” some people are asking what this means for the average person.

 

The executive order directs federal agencies to step up efforts to police abuse of a visa program that allows high-skilled foreigners to work in the U.S. The order also tasks agencies to find ways to modify this visa, called an H-1B, so it would be re-oriented to go to the most highly-skilled and most highly-paid foreign workers. That’s the “Hire American” part of the plan.

 

The “Buy American” aspect of Trump’s order would make some changes to federal purchasing rules so it would be more difficult for agencies to buy foreign products. There is a requirement already on the books that the federal government buy American products when possible, but waivers can be granted to get around it.

 

Supporters of the president’s actions say they will prioritize American workers and American businesses. Foreign workers using H-1B visas, the argument goes, take jobs from American workers. Changing the system to prioritize higher-paid foreign workers will ensure that there are more jobs for Americans to do. And strengthening the “Buy American” law already in place will stimulate U.S. companies that supply goods to the government.

 

Opponents of this order point out that many companies need foreign workers to compete in the global marketplace. They say this is especially true of companies that use H-1B visas, since they tend to be in the high-tech industry. Without foreign workers, the argument goes, these companies would not be able to fill the jobs they need filled. As for “Buy American,” critics contend that government should be looking for the lowest price possible for products, regardless of where they come from. Anything less is wasting taxpayer money.

 

What do you think? Do you support President Trump’s actions to help U.S. workers and businesses? Or will this executive order hurt high-tech companies and taxpayers?

 

Tax Reform May be Next on DC’s Agenda

 

Taxes are forefront in the minds of millions of Americans today. As you rush to file your taxes, you may be thinking that there should be an easier way. The idea of tax reform is a popular one, but the consensus breaks down over details. Reduce rates, hike taxes on the rich, simplify the code – there are numerous ideas about how the tax code could be modified.

 

These issues may soon be taken up by members of Congress. President Trump has said that he would like to see a tax reform bill on his desk by August. That is unlikely to happen, given the complexity of the issue and the fact that real work has yet to start. However, changes to the tax code are probably the next big thing that lawmakers in Washington will be discussing.

 

Here are some of the ideas being considered:

 

Lower tax rates: In his presidential campaign, Donald Trump was clear that he wanted tax rates cut. He sees these cuts as a way to stimulate economic growth. President Trump also campaigned on consolidating tax brackets from seven into three. The questions for Congress to work out include how low should rates be cut, should revenue losses from rate cuts be offset with higher taxes elsewhere, and what group of taxpayers should benefit from cuts?

 

Increasing the standard deduction: If you don’t itemize your income tax deductions, you get to deduct a portion of your income right at the start. President Trump’s campaign plan called for more than doubling this standard deduction.

 

Border adjustment tax: Some House Republicans have floated the idea of changing the way taxes are collected from businesses. Right now, the U.S. government collects taxes on what companies produce in the U.S. Under this proposal, the U.S. government would collect taxes from what companies sell in the U.S. That means no taxes on goods that are exported but new taxes on goods that are imported for purchase by American consumers.

 

Cutting payroll tax: The taxes that fund Social Security and Medicare are called payroll taxes. Unlike the income tax, these taxes aren’t progressive – that is, they don’t increase as income goes up. Some in Congress have proposed cutting these taxes as a way to lighten the tax load on lower-income workers. However, if this happens they would need to find other tax streams to pay for Social Security and Medicare.

 

Eliminating deductions: Removing provisions of the tax code that give breaks for certain behavior is one of the main ways to simplify the code. Eliminating these tax breaks also means more revenue, which could help offset any tax rate cuts. That is what happened during the tax code rewrite in 1986, a bipartisan effort that many hail as a good blueprint for future action. One thing being discussed is the elimination of the deduction for state and local taxes.

 

Cutting the corporate tax rate: Compared to other countries, the U.S. has a high corporate income tax rate. There has been bipartisan support for lowering this rate. For instance, President Obama proposed lowering it from 35% to 28%.

 

Given that it is early in the process, there are certain to be many other ideas for altering the tax code. It may even prove to be too contentious to achieve majority support around a single reform package, which will leave us with the current tax code in place. However, after the failure of legislation that would have repealed Obamacare, President Trump and congressional Republicans have significant motivation to score a victory on this issue.

 

What do you think that tax reform should include?

 

Tennessee Senate Joint Resolution 9: Call for planning balanced budget constitutional convention

 

Check out this key bill recently passed by elected officials in Tennessee, check-in to the VoteSpotter app to see how your legislators voted, and comment below to share what you think!

 

Senate Joint Resolution 9, Call for planning balanced budget constitutional convention: Passed 27 to 3 in the state Senate on February 6, 2017

 

To call for a convention of the states to make plans for a convention that would amend the federal Constitution to require a balanced federal budget.

 

Comment below to share what you think of Tennessee Senate Joint Resolution 9!

 

Tax Increases Coming to West Virginia?

 

 

If Governor Jim Justice gets his way, West Virginians may be paying higher taxes and fees. In his budget proposal, the governor has asked legislators to approvea variety of tax increases as a way to eliminate the gap between revenue and desired spending.

 

In early February, the governor proposed tax and fee increases that included:

  • Increasing the sales tax from 6% to 6.5%
  • Imposing the sales tax on a variety of services that are currently untaxed
  • Levying a .2% gross receipts tax, which a business would pay regardless of its profitability
  • Increasing the beer tax
  • Raising the DMV license fee by $20

 

Gov. Justice also proposed raising the gasoline tax by 10 cents a gallon to pay for new infrastructure projects. That would bring the state gasoline tax to 43.2 cents a gallon.

 

Later in the month, he revised his proposal in a few significant ways:

  • Increasing the gasoline tax by 4.5 cents a gallon as opposed to 10 cents
  • Charging out-of-state motorists increased tolls when they use West Virginia toll roads
  • Imposing a 1-cent-per-ounce tax on sugar-sweetened drinks

 

Do you think these tax increases are the best way to deal with the state’s budget situation? Are you willing to pay higher gasoline prices to pay for state infrastructure projects?

 

Michigan House Bill 4001: Cut state income tax rate .2 percent

 

Check out this key bill recently passed by elected officials in Michigan, check-in to the VoteSpotter app to see how your legislators voted, and comment below to share what you think!

 

House Bill 4001, Cut state income tax rate .2 percent: Failed 52 to 55 in the state House on February 23, 2017

 

To cut the state income tax from the current 4.25 percent to 4.05 percent over two years. Twelve Republicans voted 'no' and one Democrat voted 'yes.'

 

Comment below to share what you think of Michigan House Bill 4001!

 

What’s Up with President Trump’s Budget?

 

 

Defense spending up. Big cuts to social programs. Federal funding for the arts on the chopping block.

 

You may have seen headlines or social media posts that give details about President Trump’s budget. Depending on where you stand, you may be cheering, weeping, or shrugging your shoulders. But what is actually going on with the president’s spending plan?

 

Officially, nothing is going on – yet. A 1990 law requires that the president submit a budget proposal to Congress by early February. Donald Trump has not done so (he wouldn’t be the first president to miss the deadline). In fact, his spokesman says that the president’s budget will be unveiled “later this year.”

 

Right now, the White House has asked agencies to find a way to increase defense spending by $54 billion and cut other spending by an equal amount.  That gives a broad idea of what the president will propose, but it does not give any details about what agencies may be targeted for cuts or what shape those cuts may take.

 

Even after the president submits his budget, this does not mean that his spending plan will go into effect. Under the federal budget procedure, the president submits a budget, but Congress must pass its own budget resolution. The congressional budget resolution may or may not incorporate what the president wants to see happen. Each chamber passes its own resolution, and these two versions must be reconciled by the two chambers.

 

The congressional budget is not even the final spending plan. It is, instead, a detailed outline of what spending should look like. If the resolution recommends changes to mandatory spending programs such as Medicaid and Social Security, Congress must pass those changes. For non-mandated spending, such as on defense or national parks, the congressional budget resolution provides a guide for appropriation committees to allocate actual spending amounts. The budget resolution does set forth special rules for consideration of some items, so it is a useful blueprint for Congress to take on future spending decisions.

 

It should be pointed out that this process is often ignored by Congress. Some years it does not pass any budget resolution. Instead, it simply passes appropriations bills to authorize a certain level of federal spending. We don’t know if that could happen this year. Given that the president is not close to submitting his budget resolution (remember, it was due in early February), chances are good that we’ll see some interesting maneuvers during this year’s budget process.

 

Comment below and share how you think President Trump and Congress should structure the 2017 federal budget!

 

North Carolina House Bill 7: Earmark share of revenue increases to the state's rainy-day fund

 

 

Check out this key bill recently passed by elected officials in North Carolina, check-in to the VoteSpotter app to see how your legislators voted, and comment below to share what you think!

 

North Carolina House Bill 7, Earmark share of revenue increases to the state's rainy-day fund: Passed 110 to 3 in the state House on February 15, 2017

 

To set aside 15 percent of new revenue growth per year in the state saving reserve. That fund currently gets one-fourth of what's left over in state coffers at the end of the fiscal year. The bill would limit the fund's use to avoiding spending cuts if revenue declines, if a court ruling imposes damages against the state, or if there is a state emergency. Also, if a proposed withdrawal is more than 7.5 percent of the last state budget, the bill would require a two-thirds vote of both houses to approve it.

 

Comment below to share what you think of North Carolina House Bill 7!

 

Pennsylvania Senate Bill 181: Establish Performance-Based Budget Review

 

Check out this key bill recently passed by elected officials in Pennsylvania, and check-in to the VoteSpotter app to see how your legislators voted.

 

Senate Bill 181, Establish performance-based budget review: Passed 49 to 0 in the state Senate on February 6, 2017

 

To direct the Secretary of Budget to review agency budgets based on performance instead of on subtracting or adding to traditional spending levels. Under a performance-based review, an agency would have to show how its proposed spending is being allocated to meet certain performance goals and benchmarks. The bill would allow the Secretary to undertake a review at least once every five years, and the General Assembly could also request such a review. The bill also directs the state to undertake a review of the effectiveness of various state tax credits.

 

Highlights of the First Presidential Debate

 

In the first debate between Hillary Clinton and Donald Trump, the candidates clashed over a number of issues, including the economy, race relations, policing, and national security.

 

One of the main themes of the night for Trump was that the U.S. is being held back by bad deals, including trade agreements like NAFTA, defense agreements with nations like Japan, or national security agreements like the one negotiated with Iran over that nation’s nuclear weapons. He said that he would bring his experience as a businessman to the office of president and negotiate better deals for the U.S.

 

Clinton stressed that she is prepared to be president, bolstering her case by focusing on policy specifics. She also made pointed appeals to minority voters and women voters.

 

The two candidates did not hesitate to attack one another. Clinton scored against Trump by going into a lengthy discussion of his refusal to release his tax returns and his questioning of whether President Obama was born in the United States. Trump hit Clinton on her e-mail server scandal. He also attempted to use the experience issue against her, saying that Clinton has been in politics for 30 years but has not used that time to address the problems she is discussing during the campaign.

 

Areas of agreement

 

While the debate mainly consisted of Trump and Clinton pointing out how they differed, there were some areas of agreement. While Trump strongly attacked free trade agreements such as NAFTA and the Trans-Pacific Partnership agreement, Clinton also took a skeptical view of many trade deals.

 

On gun control, Clinton called for stronger measures to restrict gun sales. One of the proposals she stressed was prohibiting individuals on the no-fly list from being able to purchase firearms. While Trump did not explicitly endorse this idea, he did suggest that he may agree with it.

 

Both Clinton and Trump agreed that the U.S. should concentrate more on cybersecurity issues.

 

Areas of disagreement

 

On the economy, Trump said that he would create jobs in the U.S. by re-negotiating trade agreements, cracking down on companies that invest overseas, lowering taxes so that the wealthy create jobs, and cutting middle class taxes.

 

Clinton laid out a plan for economic growth that consists of creating new government programs for things like paid family leave and college tuition subsidies. She also repeatedly called for raising taxes on the wealthy. She said that Trump’s tax cuts are “trickle down” and will not work, befitting Trump himself, not the American people.

 

On crime, Trump said, “We need law and order.” He vigorously defended the controversial stop-and-frisk practice that came under fire and was halted by a judge in New York City. Clinton said there was an epidemic of gun violence and called for more gun control

 

When it came to national security, Trump blames Obama and Clinton for creating a vacuum that led to ISIS. He said the U.S. should have taken Iraq’s oil to deprive ISIS of income. Clinton accused Trump of not caring whether other nations obtained nuclear weapons, but Trump countered that he believed nuclear weapons (not global warming) was the single greatest threat to the U.S.

 

On the nuclear issue, Clinton said, “The man who can be provoked by a tweet should not have his finger near the nuclear codes…”

 

Their best lines?

 

Clinton: “I have a feeling by the end of this evening I'm going to be blamed for everything that's ever happened.”

Trump: “Why not?”
Clinton: “Why not? Yeah, why not? Just join the debate by saying more crazy things.”

 

Trump: “I have a much better temperament than she does… my strongest asset, maybe by far, is my temperament.”

 

Clinton: “I think Donald just criticized me for preparing for this debate. And yes, I did. And you know what else I prepared for? I prepared to be president. And I think that's a good thing.”

 

Trump (on who may have hacked the DNC e-mails): “It could have been Russia. It could be China. It could be someone sitting on their bed that weighs 400 pounds.”

 

What do you think?

Do you think Clinton or Trump won the debate? What do you think was their strongest moment against each other?

Impeach the IRS Commissioner?

If some congressmen have their way, Internal Revenue Service Commissioner John Koskinen will be leaving office shortly.

There is a move in the House of Representatives to impeach the Commissioner Koskinen. Members of the House could force a vote on this in the near future. Members of the House Freedom Caucus want him disciplined for what they view as a failure to comply with the investigation into Lois Lerner’s activities regarding conservative nonprofits.

National Review sums up the case against Koskinen:

“Koskinen, who became commissioner after Lerner left, failed to disclose the disappearance of e-mails germane to a congressional investigation of IRS misbehavior. Under his leadership, the IRS failed to comply with a preservation order pertaining to an investigation. He did not testify accurately or keep promises made to Congress. Subpoenaed documents, including 422 tapes potentially containing 24,000 Lerner e-mails, were destroyed. He falsely testified that the Government Accountability Office’s report on IRS practices found ‘no examples of anyone who was improperly selected for an audit.’”

The editors of the Washington Post, on the other hand, say that impeachment would be an abuse of the process:

“The cumbersome and partisan Senate confirmation process has made it hard enough to fully staff the highest realms of government with competent people. Never-ending, partisan impeachment proceedings against executive officers would make it even harder to keep the essential mechanics of government working. The result would be more bureaucratic bungling, not less.”

Generally impeachment motions first go through the House Judiciary Committee. With the Judiciary Committee failing to act, however, some House Republicans want to use a procedural motion to force a vote on the House floor. That idea is meeting resistance from some House Republican leaders.

Impeachment is only the first step in the process of removal for office. If a majority of the House of Representatives votes in favor of impeachment, then it would be up to the Senate to have a trial and vote on whether to remove Koskinen from office. Senate leaders have said they will not conduct a trial if the House votes for impeachment.

Only one cabinet official has ever been impeached -- Secretary of War William Belknap in 1876.

Do you think that the House of Representatives should impeach Commissioner Koskinen? Or do you think that the impeachment proceedings are an abuse of the process?

What’s in Trump's Economic Plan?

The economy is one of the major issues in this presidential race, with both candidates touting plans to create jobs. On August 8, GOP presidential candidate gave a speech outlining his “America First economic plan.”

What did Trump pledge to do in this speech?

  • Eliminate the carried interest deduction for income taxes
  • Reduce the 7 income tax brackets to 3. These would be rates at 12%, 25%, and 33%. In contrast, the current income tax brackets are 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%
  • Cut the corporate income tax to 15% from 35%
  • Allow families to take a full deduction for childcare expenses
  • Permit American companies to repatriate income back into the U.S. with a 10% tax
  • Eliminate the “death tax,” also known as the estate tax
  • Issue a temporary moratorium on new federal regulations
  • Cancel all “illegal and overreaching” executive orders
  • Ask agencies to compile a list of unnecessary rules or rules that do not improve public safety, and then eliminate them
  • Withdraw from the Trans-Pacific Partnership
  • Impose tariffs on countries that “unfairly subsidiz[e] their goods”
  • Renegotiate NAFTA
  • Enforce American trade agreements with China
  • Lift federal restrictions on American energy development
  • Repeal and replace the Affordable Care Act, or Obamacare
  • Force military allies to pay “their fair share” for protection
  • Reform the Veterans Health Administration

What do you think about Donald Trump’s economic plan?

Would a Redskins Stadium be Worth It?

The Washington Redskins may be coming to Virginia. Would the state benefit if taxpayers shelled out for a new stadium?

Virginia Governor Terry McCauliffe is having what he calls “very serious negotiations” to persuade the Washington Redskins to move to Northern Virginia. While the Redskins’ current lease in Maryland is not up for another decade, the team is already looking at its options for future stadiums.

Governor McCauliffe would like the state to use its resources to persuade the team to move across the Potomac River. However, he also says, “It’s got to make sense for the taxpayers of Virginia.”

Will such a deal make sense for taxpayers? It may be possible, but it will be difficult. The academic literature on the economic impact of stadiums and the return to taxpayers is summed up by researchers from the Brookings Institution:

A new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment. No recent facility appears to have earned anything approaching a reasonable return on investment. No recent facility has been self-financing in terms of its impact on net tax revenues. Regardless of whether the unit of analysis is a local neighborhood, a city, or an entire metropolitan area, the economic benefits of sports facilities are de minimus.

Virginians may gain some pride from having the Washington Redskins located within their commonwealth. However, as Governor McCauliffe works to lure the team, he should be aware of the ways that stadium subsidies can go wrong.

Do you support using taxpayer dollars to subsidize sports stadiums?

Gov. Scott Walker at odds with Assembly Republicans over how to fix road funding shortfall

In Wisconsin, Gov. Scott Walker is standing firm against raising the gas tax without cutting taxes elsewhere. Some legislators are pushing to increase the gas tax to fund already-scheduled projects. Do you support a higher gas tax if there are no offsetting cuts in other taxes?

http://fox6now.com/2016/06/28/gov-scott-walker-at-odds-with-top-republicans-over-how-to-fix-road-funding-shortfall/

State-Run Internet Gambling

According to Capitol reporter Tim Skubick writing for Mlive, last November the Michigan lottery quietly began letting individuals buy lottery tickets online. The number of online users has grown 300 percent, from 86,000 the first month to 322,000 now, with sales of $147 million.

 

Elsewhere in the Capitol, a Senate committee has advanced Senate Bills 889 and 890 to the full body for consideration. The bills would allow casinos in the state to enter the internet gambling market, subject to a 10 percent tax. A fiscal analysis suggests the move may or may not increase state revenues, because it could divert sales from the lottery.

 

None of the above addresses the ethical concerns surrounding state governments not just being in the gambling business but advertising heavily to entice individuals to gamble.

 

Research suggests that low-income and minority individuals disproportionately spend money on lottery gambling, where even more than casinos “the house” is the only real winner. In other words, government lotteries prey upon those least able to afford them.

 

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