October 25, 2016

Arlington County Represented by 'Big Spenders' in Congress

The National Taxpayers Union (NTU) released their annual study of the voting records of members of Congress for First Session (2015) of the 114th Congress. The study is unique in that it counts "actual vote -- every vote that affects taxes, spending, and debt," according to NTU's press release, yesterday.

NTU explains why their annual study is different, writing, "While many organizations focus only on a handful of votes, NTU fairly and accurately evaluates votes and spending evenly. Regardless of political affiliation, all members of Congress are treated equally as votes are evaluated in how they impact overburdened taxpayers across the country." They also go on to say:

"The Taxpayer Score measures every member’s support level to cut spending, reducing regulations, and opposition to increasing taxes.

Members who receive an “A” have been the strongest supporters of sound tax and spending policies. These Members of Congress receive our “Taxpayers’ Friend Award” for their hard work and dedication to fighting for good policies and lower taxes for all Americans. Those who receive a “B” have proven to have a “good” voting record on controlling spending and taxes, as well as voting in favor of taxpayers most of the time. Earning a “C” indicates the minimal acceptance on their voting record to fight against increased taxes and spending. Those who receive a “D” or “F” reflect those members who have not fought against increased spending and tax policies. These “Big Spenders” are those who NTU views as not voting in support of taxpayers interests, but instead for increased government spending and control. (emphasis added)

"Every roll call vote in the First Session of the 114th Congress was analyzed for this year’s Rates Congress, and those that affected the amounts of federal taxes, spending, debt, or regulations were included in the grade evaluations. There were 141 votes in the Senate and 267 in the House that involved appropriations, tax bills, amendments, and certain procedural votes that affect the financial burden on taxpayers.

"The number of votes included in this year’s analysis reflects an objective and nonpartisan weighting of the votes, calculated, and numerous error checks ensure the highest possible level of accuracy in the data. While we believe this method is the most accurate, no study or analysis can fully evaluate every Member’s overall record."

For a more detailed explanation of the Taxpayer Score, and the computation methodology, visit Rates Congress.

All three members of Congress who represent Arlington County received a grade of 'F' for their 2015 voting record, qualifying them as Big Spenders:

  • Senator Mark Warner -- F
  • Senator Tim Kaine -- F
  • Representative Don Beyer -- F

By comparison, Rep. Dave Brat, who defeated House Majority Leader Eric Cantor in the June 2014 Republican primary for Virginia's 7th Congressional District is a Taxpayer Friend because of his 'A' Taxpayer Score. Other Virginia Representatives who received 'good' scores included Bob Goodlatte (B+), Randy Forbes (B+), Robert Hurt (B+), Morgan Griffith (B), Robert Wittman (B), and Barbara Comstock (B-). Other Virginia representatives and their scores were Edward Rigell (C+), Gerald Connelly (F), and Robert Scott (F).

To see charts of how the average Taxpayer Scores have trended from 2010 to 2015 for both the Senate and the House of Representatives, click here. To view the results for all members of Congress for the 1st session of the 114th Congress, click here.

For the 2015 list of Taxpayer Friends in the House and Senate, click here.

For a list of votes used to establish the NTU Ratings, please click here. And finally, to see the results of previous years of Rates Congress, click here.

Something to remember as you step into the voting booth in two weeks -- November 8, 2016? If you're still concerned about the Big Spenders who represent Arlington County in Congress, take a few minutes and write your member of Congress. For those not living in Arlington County, contact information is available at the Library of Congress' Congress.gov. Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -- write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a written response. And tell them ACTA sent you.

October 24, 2016

Double-Digit Health Insurance Premium Hikes on the Way

CNS News posted an Associated Press story this evening, written by the AP's Ricardo Alonso--Zaldivar, with a heading that says, "Obama administration confirms double-digit premium hikes."

The AP news article opened this way:

"Premiums will go up sharply next year under President Barack Obama's health care law, and many consumers will be down to just one insurer, the administration confirmed Monday. That's sure to stoke another "Obamacare" controversy days before a presidential election.

"Before taxpayer-provided subsidies, premiums for a midlevel benchmark plan will increase an average of 25 percent across the 39 states served by the federally run online market, according to a report from the Department of Health and Human Services. Some states will see much bigger jumps, others less.

"Moreover, about 1 in 5 consumers will only have plans from a single insurer to pick from, after major national carriers such as UnitedHealth Group, Humana and Aetna scaled back their roles.

""Consumers will be faced this year with not only big premium increases but also with a declining number of insurers participating, and that will lead to a tumultuous open enrollment period," said Larry Levitt, who tracks the health care law for the nonpartisan Kaiser Family Foundation."

The AP story also reported:

"HHS essentially confirmed state-by-state reports that have been coming in for months. Window shopping for plans and premiums is already available through HealthCare.gov.

"Administration officials are stressing that subsidies provided under the law, which are designed to rise alongside premiums, will insulate most customers from sticker shock. They add that consumers who are willing to switch to cheaper plans will still be able to find bargains.

"Headline rates are generally rising faster than in previous years," acknowledged HHS spokesman Kevin Griffis. But he added that for most consumers, "headline rates are not what they pay."

"The vast majority of the more than 10 million customers who purchase through HealthCare.gov and its state-run counterparts do receive generous financial assistance. "Enrollment is concentrated among very low-income individuals who receive significant government subsidies to reduce premiums and cost-sharing," said Caroline Pearson of the consulting firm Avalere Health."

Here's a link to the story at the Associated Press website.

At the Washington Examiner, the story about the hike in premiums, posted this afternoon by Paige Winfield Cunningham, begins this way:

"Obamacare shoppers in most states will see premiums rise by 22 percent and have 36 percent fewer plans to choose from next year, according to insurance plan data released Monday by the Obama administration.

"The buffet of 2017 plan options is decidedly smaller and pricier than in years past, prompting officials to stress the availability of federal subsidies for most consumers and the importance of shopping around for more affordable coverage.

"When the Affordable Care Act's fourth enrollment season begins Nov. 1, consumers in the 38 states using the federal healthcare.gov marketplace will see median prices for the cheapest plans in the middle silver tier rise 16 percent. Average rates in those plans will rise by 25 percent and by 22 percent when factoring in three state-run marketplaces for which data were available."

Finally, Investor's Business Daily editorialized last week:

"President Obama once told the country that ObamaCare was a "great product." When open enrollment for ObamaCare begins on Nov. 1, millions of Americans will discover just how big a lie this was.

"Although the mainstream press has largely ignored it during this election in favor of wall-to-wall coverage of Donald Trump's alleged misdeeds, ObamaCare is absolutely coming unglued.

"When the exchanges open for business in two weeks, people looking for insurance there will find far fewer choices, sky-high premiums and lower-quality plans.

"A recent analysis by Bloomberg found that because insurance companies have bailed out of so many ObamaCare markets, more than 1.4 million people will be forced to switch plans during open enrollment. In most cases, that will mean finding new doctors and other providers as well.

"Millions will find only one insurance company participating in their area. Oklahoma, Alaska, Wyoming, Alabama and South Carolina will have one ObamaCare insurer statewide, and so will most counties in Florida, Mississippi, North Carolina. Before ObamaCare, 17 insurers competed for business in Kansas. When the exchanges open up in November, most will have a choice of two.

"A Kaiser Family Foundation review found that, overall, nearly a third of the counties in the U.S. will have only one insurer.

"Premiums for the vast majority of these plans will climb at rates that were unimaginable before ObamaCare "fixed" the individual insurance market."

Be sure to read the complete articles before going to the polls on Tuesday, November 8, 2016. Then take a few minutes and write your member of Congress. Contact information is available at the Library of Congress' Congress.gov. Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -- write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a written response. And tell them ACTA sent you.

UPDATE (10/25/16):

At Power Line yesterday, Paul Mirengoff noted, among other comments:

"The subsidies will shield many Obamacare purchasers from the impact of the increase, but a large of number of purchasers will be hammered. And, of course, taxpayers will be hit as well by virtue of the increased subsidy payments.

"Most significantly, the skyrocketing premiums non-subsidized Obamacare customers face will fuel the cycle that’s causing premiums to skyrocket. Premiums risen dramatically because too few healthy people who aren’t entitled to subsidies are enrolling in Obamacare. Thus, those who have’t yet eschewed it are required to pay more.

"But the more they are asked to pay, the more likely they are to eschew Obamacare in the future. This will mean that premiums must be significantly hiked again the next time, and the cycle — or “death spiral” — will continue."

Hot Air's John Sexton identified a couple examples of biased reporting, including the one:

"Despite the shockingly bad news, the AP can’t resist turning this into a ‘Republicans pounce’ story. The 5th paragraph begins, “Republicans will pounce on the numbers as confirmation that insurance markets created by the 2010 health overhaul are on the verge of collapsing in a ‘death spiral.'”

October 23, 2016

National Debt to Soon Cost the Typical Family $12,000

In a commentary for the Heritage Foundation's Daily Signal on Thursday, October20, Romina Boccia and Lauren Bowman wrote:

"When confronted in the final presidential debate with the assertion that each of their plans would increase the national debt, the candidates denied it by saying either economic growth or higher taxes would offset this increase.

"But deficit spending and unsustainable debt pose a significant threat to our economy. The House Budget Committee recognizes this threat, recently releasing a working paper highlighting the damaging economic effects of the national debt. The results are scary.

"As the government runs increasing budget deficits, it must borrow more money to fund current commitments, such as entitlements, and make interest payments on the debt. This makes interest rates a larger share of the federal budget and in turn increases borrowing by the government.

"Academic research shows that high national debt is associated with less economic output and less prosperity for individuals and families.

"The Congressional Budget Office’s projections reflect this. Compared to a future where the government adopted reforms that stabilized debt at the current level of 75 percent of gross domestic product, the current path of growing spending and debt results in an annual income loss of about $12,000 for the average family by 2046." (emphasis added)

They then write:

"Congress and the new president must begin to take our deficit spending and growing debt seriously.

"Lawmakers should not raise taxes to try to solve the government’s fiscal problems. Our debt and deficits are the result of a spending problem, not a revenue problem.

"Paul Winfree, director of the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation, writes that “revenue growth cannot keep up with spending if spending increases at a rate faster than the economy is growing in the long run.”

"This is exactly the scenario we’re witnessing, given current projections.

"Raising taxes would weaken the economy further and worsen the fiscal trajectory. The United States already has the highest corporate tax rate in the industrialized world; raising taxes higher would discourage investment and job creation."

Before providing two charts providing information about the national debt today, they write:

"The fact that the national debt jumped by $1.4 trillion in one short year should spur Congress to put an end to this excess.

"The debt hit a record-breaking high of $19.6 trillion at the close of the federal government’s 2016 fiscal year on Sept. 30. It had totaled $18.1 trillion at the end of the previous fiscal year."

First chart:

They also say, "Growing spending fuels the growth in debt. The Congressional Budget Office projects that the debt will rise to 86 percent of GDP by 2026, to 106 percent by 2035, and to 141 percent by 2046," and then present the second chart:

Both commentaries contain several embedded links that contain additional information. Two of them are especially informative. They are the Heritage Foundation’s “Blueprint for Balance” and “Blueprint for Reform,” which "lay out a detailed plan to reform entitlements and control spending to balance the budget and reduce the debt."

Concerned about the national debt, and what it will cost the next generation? Start by writing to your member of Congress. Contact information is available at the Library of Congress' Congress.gov. Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -- write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a written response. And tell them ACTA sent you.

October 22, 2016

A Thought about the Inefficiency of High Taxation

"Harvard economist Martin Feldstein, using the 1986 tax reform, estimated that when marginal tax rates on the top income bracket dropped from 50 percent to 28 percent, reported taxable income increased by 44 percent. This didn't fully make up for the reduction in revenues caused by the reduction in the tax rates, but it did pay for half of it and exposed the inefficiency of high taxation."

~ Luigi Zingales, Economist

Source: page 219, "A Capitalism for the People: Recapturing the Lost Genius of American Prosperity.

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Luigi Zingales is the Robert C. McCormack Distinguished Service Professor of Entrepreneurship and Finance, and Charles M. Harper Faculty Fellow at the University of Chicago Booth School of Business. His " research interests span from corporate governance to financial development, from political economy to the economic effects of culture. He co-developed the Financial Trust Index, which is designed to monitor the level of trust that Americans have toward their financial system. In addition to holding his position at Chicago Booth, Zingales is currently a faculty research fellow for the National Bureau of Economic Research, a research fellow for the Center for Economic Policy Research, and a fellow of the European Governance Institute. He is also an editorialist for Il Sole 24 Ore, the Italian equivalent of the Financial Times. Zingales also serves on the Committee on Capital Markets Regulation, which has been examining the legislative, regulatory, and legal issues affecting how public companies function. In 2014 he was the President of the American Finance Association," according to the faculty directory.

October 21, 2016

Kudos to the Sun Gazette for One of Its 'Highs & Lows'

The Arlington Sun Gazette included two short editorials in its Highs & Lows on its opinion page this week. The second editorial -- called a Thumbs Down in this case -- concerns a proposal by the Virginia Association of Counties (VACo) to ask the Virginia General Assembly to allow counties to double the meals tax rate and to remove the requirement that voters first approve a meals tax before it's imposed.

Here's the second Thumbs Down in this week's Arlington Sun Gazette:

"To a little-noticed but outrageous proposal by the Virginia Association of Counties, of which the Arlington County government is a dues-paying member.

"As part of its 2017 legislative package, currently in the draft stage, the organization plans to ask the General Assembly to allow counties (a) to double the maximum meals-tax rate that can be imposed, from 4 percent to 8 percent, and (b) eliminate the requirement that counties get voter approval before imposing such a tax.

"(An aside: Arlington’s elected officials got a sweetheart deal from the legislature way back in the day; they were allowed to impose a meals tax if all five County Board members agreed. They did, and we got the tax with no public input.)

"Counties and their state organization no doubt will contend they’re just trying to get the same powers that cities have when it comes to taxation. But it looks to us to be another attempt to pick taxpayers’ pockets without the consent of the governed.

"Rest assured: The proposal is going nowhere in Richmond. But the fact it was even brought up shows how out of touch some leaders and staff can be. The public isn’t your never-ending ATM, folks."

We growled about the VACo legislative proposal on October 11, 2016.

October 20, 2016

Cutting Office-Vacancy Rate Will Require a ''Long-Term Slog'

At the Arlington Sun Gazette this morning, Scott McCaffrey reports on a discussion at the Arlington County Board's Tuesday recessed meeting (videos of past meeting available), writing:

"In a briefing described by one County Board member as sobering, Arlington officials said they believe the best-case economic-development scenario for the county is to “slowly and steadily” reduce record office-vacancy rates.

"But even that relatively modest hope could face headwinds, with new employment patterns, increased competition from other jurisdictions and the federal government angling for cheaper leases all conspiring against what had once been Arlington’s main selling point: its central location.

"Arlington’s combination of high vacancy rates and high average rents is “not a good place” to be in, said Arlington Economic Development chief Victor Hoskins during an Oct. 18 briefing with elected officials."

McCaffrey added:

"Countywide, office-vacancy rates stood at just over 20 percent in mid-2016, with county economic-development officials guesstimating the rate ultimately will decline to under 15 percent. But that might not happen until 2023, and perhaps not at all if the General Services Administration continues to pull out of Arlington."

He also reported the "commercial office space has seen average rents decline over the past five years in Arlington, from $45.43 per square foot in 2011 to $42.95 in 2016," and then added, 'County Board member Christian Dorsey called the discussion 'sobering . . . but illuminating.'"

McCaffrey's entire article is well-worth reading.

We growled on April 29, 2016 about jobs and economic development, noting the average office vacancy rate in February 2015 was 21.7%. It dropped to 20.1% in February 2016. We also growled on October 5, 2015, about the county's high occupancy rate, pointing out that 3 of 4 County Board candidates' top concern was Arlington's high office occupancy rate. Finally, on March 13, 2015, we growled about a March 3 presentation by the chair of the Arlington County Board's Economic Development Commission, Sally Duran, discuss "the importance of a flourishing business community which will substantially benefit Arlington taxpayers." An important take away from her presentation was that a 10% increase in office occupancy should result in a $34 million increase in real estate taxes.

At the time, the office vacancy rate was 21.8%. In a County Board budget work session a week later, the newly-appointed director of economic development proposed an additional "investment" of taxpayer dollars of $3.95 million for each of the next three years to "(r)educe office vacancy by half and diversify the Arlington economy over the next 36 months." Now they say the office-vacancy rate may decline to 15% by 2023, or even achieve no growth at all. It will be interesting to see just how accountable the Board holds the director of economic development.

If you are concerned about the Arlington County economy, and its real estate tax base, take a few minutes and write to the Arlington County Board. Just click-on the link below:

  • Call the County Board office at (703) 228-3130

And tell them ACTA sent you!

October 19, 2016

Cell Phone Tax Burdens Rise Two Years in a Row

What is the Federal Universal Service Fund?

"The federal USF (FUSF) is administered by the Federal Communications Commission (FCC) under open-ended authority from Congress. The program subsidizes telecommunications services for schools, libraries, hospitals, low-income people, and rural telephone companies operating in high cost areas," according to the Tax Foundation study.

Last Tuesday, October 11, the Tax Foundation released a new, state-by-state analysis of cell phone taxes, "done jointly with Scott Mackey of KSE Partners" that found "the average U.S. customer pays more than 18 percent in taxes and fees on their wireless bill, several times the state sales tax rates," writes Joseph Henchman at the Tax Foundation's Tax Policy Blog.

Here are the key findings, according to Henchman:

  • Each year, consumers pay an estimated $17.2 billion in wireless taxes, fees, and government surcharges combined.
  • In just two years, the average wireless tax burden has increased by 1.5 percentage points, and wireless taxes are now 4.5 percentage points higher than they were ten years ago.
  • The average state-local wireless tax in the U.S. is 11.93%, more than 4 percentage points higher than the average state-local sales tax.
  • The five states with the highest combined state and local wireless taxes and fees are Washington (18.8%), Nebraska (18.7%), New York (18.0%), Illinois (17.8%), and Pennsylvania (15.7%).
  • The five states with the lowest combined state and local wireless taxes and fees are Oregon (1.8%), Nevada (2.1%), Idaho (2.3%), Montana (6.2%), and Delaware (6.3%).
  • Six major U.S. cities now have wireless tax rates exceeding 25 percent: Chicago (36.24%), Baltimore (29.84%), New York (27.11%), Philadelphia (26.24%), Omaha (26.06%), and Seattle (25.94%).

According to the study, "Wireless consumers pay an estimated $17.2 billion in taxes, fees, and government surcharges." This includes: "$7.0 billion in sales taxes and other non-discriminatory broad-based consumption taxes; $5.1 billion in federal Universal Service Fund (FUSF) surcharges; $2.5 billion in 911 fees; and, $2.6 billion in other discriminatory state and local taxes, fees, and surcharges."

It's important to note, however, "In recent years, increases in the federal USF charge were the largest drivers of rising wireless taxes and fees. This year, however, state and local taxes and fees increased significantly faster that the federal USF surcharge."

You can access both the executive summary and entire 19-page report here. It's worth taking a look since there are several helpful tables and charts.

Interestingly, "The FUSF rate (euphemistically called the “contribution factor”) is set by the FCC each quarter. For the period beginning July 1, 2016, the contribution factor is 17.9%. Thus, the FUSF rate is 6.46% (17.9% times 62.9%)."  Here's the Federal Universal Contribution Fund Rates from 2000 to 2016:

In this study, Virginia scores well, ranking #47 with a combined state-local rate of 6.68%. Coming in #1 was the state of Washington with a state-local rate of 18.78% followed by Nebraska with a combined rate of 18.67% and New York was #3 with a combined rate of 18.04%. The federal government adds on an additional 6.64%. So kudos on this study to the Virginia General Assembly!

Concerned about the taxes you pay on your cell phone? Start by writing to your member of Congress. Contact information is available at the Library of Congress' Congress.gov. Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -- write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a written response. And tell them ACTA sent you.

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Items in Growls are written by individual ACTA members and do not necessarily represent the views of the Arlington County Taxpayers Association, Inc. Please send comments about Growls to The Growl Meister