Written by Alex Newman
As the implementation deadline looms large for a deeply controversial new tax regime adopted largely by congressional Democrats and the Obama administration, critics of the measure are mounting a constitutional challenge, saying the scheme is wildly unconstitutional and must be struck down. Opponents of the Foreign Account Tax Compliance Act, or FATCA, have now brought on one of America’s top constitutional lawyers to lead the fight. In his initial analysis, the heavyweight attorney concluded that the sprawling addition to the U.S. tax code violates multiple provisions of the Constitution and, as such, must come down.
Faced with what even compliance mongers have said would be a “train wreck” on July 1, the day full enforcement of FATCA was supposed to begin following previous unilateral delays by the Obama administration, the IRS and the U.S. Treasury recently announced a “transition period” extending into 2015. According to the opaque announcement, the federal government will delay imposing harsh penalties on banks for now — as long as authorities believe they are trying in “good faith” to comply with the byzantine new tax regime. In other words: more lawlessness.
If opponents of the scheme get their way, however, it may all be a moot point. Attorney Jim Bopp — described by analysts as a “superlawyer” for his role in the Supreme Court striking down other unconstitutional statutes such as McCain-Feingold — announced that he was taking up the case. In an interview with the Washington Times and other statements, Bopp, who is working with the group Republicans Overseas to kill the scheme, outlined three primary constitutional problems with FATCA and the related Foreign Bank Account Report (FABR).
“It is our preliminary opinion that the potentially meritorious claims are a violation of the treaty power, an 8th Amendment Excessive Fines Claim, and a 4th Amendment Search and Seizure Claim,” Bopp said in a statement posted online by Republicans Overseas. “We do not believe that a claim based on an unconstitutional delegation of Congressional power has merit. We believe that these three claims form the basis for a successful suit that would stop the damage that FATCA and FBAR have inflicted on U.S. citizens.”
First of all, because the Treasury is unilaterally signing unauthorized pseudo-treaties with foreign governments to violate privacy rights, the Senate’s constitutionally mandated role in ratifying treaties has been usurped. Numerous other experts have made the same argument, as The New American magazine reported in a major report on FATCA published last month. Already, without any purported authority to do so from the Constitution, or the FATCA statute itself, dozens of such “agreements” to gather and share private financial information have been signed with foreign rulers.
According to Bopp, the FATCA statute also violates two of the unalienable rights enshrined in the U.S. Constitution. Under the Fourth Amendment, privacy is supposed to be protected and the government needs a warrant to infringe on it. FATCA, though, takes the opposite approach, indiscriminately gathering sensitive information on everyone in an NSA-style dragnet for perusal by authorities. Multiple foreign governments have been coerced by the Obama administration to undo their own protections for privacy rights in an effort to comply with FATCA.
Finally, the Eighth Amendment prohibiting cruel and unusual punishment, as well as excessive fines, might also represent a viable avenue for challenging FATCA and related schemes. Under the emerging tax regime, Americans abroad who for whatever reason have not complied perfectly with unimaginably complex IRS demands can be hit with crippling penalties and fines that in some cases could literally threaten the life savings of entire families. Critics say that must end; and experts believe the courts might be inclined to agree. Most U.S. expats were not even aware of the purported IRS requirements that now threaten their financial survival.
Written by Alex Newman
With the now-infamous federal abuses against the Bundy ranching family and its supporters in Nevada helping to awaken a sleeping giant, liberty-minded elected officials from Western states are coming together with citizens to take action in defense of the Constitution and the West. Their mission: to wrest control over the vast expanses of land and wealth in the region that are unconstitutionally claimed by the Washington, D.C.-based political and bureaucratic classes. Now, a new alliance of lawmakers and citizens has a concrete plan to make those goals a reality.
As The New American reported this week, more than 50 elected officials from nine Western states met on April 18 at the Utah Capitol for the Legislative Summit on the Transfer for Public Lands. Among them were state House speakers, state senators, a U.S. senator, county commissioners, and more. The goal, multiple organizers and attendees explained, is to strip the federal government of the almost 50 percent of land in Western states that it claims to “own” in defiance of the U.S. Constitution and various agreements.
One of the lawmakers who participated, Washington State Rep. Matt Shea, a liberty-minded Republican who also stood with the Bundy family, says that lawmakers from Western states are determined to protect the Constitution and their constituents. “Legislators from across the West are saying enough is enough,” Rep. Shea told The New American after the summit in Salt Lake City. “We are banding together to fight federal overreach wherever it rears its ugly head, not just talk about it.”
To do that, last week, another alliance of lawmakers, citizens, businessman, ranchers, sheriffs, officials, and more came together and created the Coalition of Western States United Against Tyranny, or COWS for short. Already, the network has seen phenomenal growth, with more than 25 lawmakers joining up by April 22, Rep. Shea explained. “COWS has grown massively in just one week and legislators from all over the West are jumping on board,” he said, adding that he was “absolutely” optimistic about their prospects for success.
COWS advocates a five-step process to evict the self-styled federal landlords from the Western United States, Rep. Shea explained. In the short term, county governments should draw up management plans for the land in coordination with state and federal agencies. Already, federal law requires that U.S. bureaucracies work with local officials, though in practice, that rarely happens. At the same time, states should also introduce and pass legislation to prohibit any net loss of private land to government.
In the longer term, federally (mis)managed lands should be transferred over to state authorities, “because government closest to the people is best,” Rep. Shea continued. “The federal government cannot possibly know how best to manage land in the thousands of different locales like the people of those areas could,” the popular Republican lawmaker explained, echoing the sentiments of countless other policymakers and activists who say the federal government needs to be stripped of its vast, unconstitutional land holdings.
“Clearly,” Shea says, “the people of Western states would do a better job managing those lands.” In fact, among the most common complaints on the issue in the West is the fact that the feds have done a terrible job maintaining the land they purport to own — especially when compared with the areas managed by state and local governments, or even private citizens. The COWS lawmakers said an excellent, proven process for transferring federally managed lands into state control has been laid out by the American Lands Council and others.
Then there is the issue of keeping promises. As the Western territories were officially becoming states, like in the East, the federal government agreed to eventually transfer those lands. However, as with so many other promises made by the D.C.-based political class, so far, it has not been fulfilled. “The enabling acts of the Western States make it clear the federal government was meant to be a steward only until such time that the states could manage,” Rep. Shea explained.
Written by Joe Wolverton, II, J.D.
In an April 9 opinion piece published in the Washington Post, commentator George Will praises the Goldwater Institute’s Compact for America and its component calling for an Article V constitutional convention.
Will points out a few of the proposal’s “benefits,” insisting that the balanced budget amendment (BBA) that it aims to enact “delivers immediate benefits to constituents.” Unfortunately, Will’s analysis of the Compact for America ignores several of its distinctly unconstitutional provisions.
First, before state legislatures vote for an Article V con-con proposal such as the Compact for America that could cause real and radical damage to our Constitution, they should first consider whether a balanced budget amendment is necessary and whether it would actually repair the damage already done by a Congress committed to ignoring the constitutional limits on its power.
The fact is that determined citizens and state legislators could rescue the United States from its financial peril without resorting to opening up the Constitution to tinkering by 38 or more state-appointed delegates, many of whom would be bought and paid for by special interests and corporations.
Imagine for a moment the brand of “conservative” delegates that might be chosen by state partisans to represent them at an Article V convention. It isn’t unlikely that Arizona might choose John McCain, Jan Brewer, or Sandra Day O’Connor. New York might send Michael Bloomberg. South Carolina could appoint Lindsey Graham. Similar selections could be predicted in every state.
Next, there is no historical proof that a balanced budget amendment would drive Congress back to within its constitutional corral. Even the most conservative estimates indicate that about 80 percent of expenditures approved by Congress violate the U.S. Constitution. That fact wouldn’t change by adding an amendment to the Constitution.
Whether these bills spend our national treasure on unconstitutional and undeclared foreign wars, billions sent overseas in the form of foreign aid, expanding the so-called entitlement programs, or redistributing wealth via corporate and individual welfare schemes, none of these outlays is authorized by the Constitution.
And don’t forget, a committed, concerned, and constitutionally aware citizenry can balance our budget more quickly than any balanced budget amendment and without the danger of letting the wolves of special interests and their political puppets into the constitutional hen house.
Third, rather than forcing Congress to adhere to spending money in only those areas specifically permitted by the Constitution in Article I, the Compact for America’s Balanced Budget Amendment specifically allows Congress to spend money on anything, no matter how unconstitutional, so long as the amount does not exceed the limits set in Section 2 of their BBA. If approved, the CFA’s BBA would do nothing to break Congress of its unconstitutional spending habits, habits that have nearly ruined the economic might of this Republic.
In fact, under the CFA’s budget-balancing scheme, Congress could continue spending on projects and programs not authorized by the Constitution.
Section 3 of the CFA’s BBA explicitly authorizes an increase in the federal debt limit to 105 percent of the actual debt level on the effective date of this amendment. That hardly sounds like a balanced budget and is not something true conservatives should support as a remedy to a runaway federal government.
The gap between what this BBA pretends to do – and what it actually does – is enormous. It has nothing to do with “balancing the budget” – it is about slipping in a new national sales tax or value-added tax in addition to the existing federal income tax.
We have become so shallow that we look no further than a name – if it sounds good, we are all for it. We hear, “balanced budget amendment”, and think, “I have to balance my budget; they should have to balance theirs.” So we don’t read the amendment, we just assume they will have to balance theirs the same way we balance ours – by cutting spending.
But that is not what the BBA does. In effect, it redefines “balancing the budget” to mean spending no more than your income plus the additional debt you incur to finance your spending. To illustrate: If your income is $100,000 a year; but you spend $175,000 a year, you “balance” your budget by borrowing the additional $75,000. See?
Under the BBA, Congress may continue to spend whatever it likes and incur as much new debt as it pleases – as long as 26 States agree. And since the States have become major consumers of federal funding, who doubts that they can’t continue to be bought? Federal grants make up almost 35% of the States’ annual budgets! The States are addicted to federal funds – who thinks they won’t agree to get more money?
The BBA enshrines Debt as a permanent feature of our Country; gives it constitutional approval; does nothing to reduce spending or “balance the budget”; authorizes a new national tax; and wipes out the “enumerated powers” limitation on the federal government.
Let’s look at the BBA, section by section, using plain and honest English. And then let’s look at how our Framers wrote our Constitution to strictly control federal spending.
Compact for America’s BBA
Section 1 says the federal government may not spend more than they take from you in taxes or add to the national debt. [Yes, you read that right.]
Section 2 accepts debt as a permanent feature of our Country – the “Authorized Debt”. This is the maximum amount of debt the federal government may incur at any given point in time.
Section 3 says whenever Congress wants, it may increase the national debt if 26 of the State Legislatures agree. [Yes, you read that right.]
Section 4 says whenever the national debt exceeds 98% of “the debt limit set by Section 2”, the President shall “impound” sufficient expenditures so that the national debt won’t exceed the “authorized debt”. And if the President doesn’t do this, Congress may impeach him!
This is a hoot, Folks! I’ll show you:
Section 5 says any new or increased federal “general revenue tax” must be approved by 2/3 of the members of both houses of Congress.
Now pay attention, because this is a monstrous trick to be played on you: Section 6 defines “general revenue tax” as “any income tax, sales tax, or value-added tax” levied by the federal government.
And when you read the first sentence of Section 5 with the definition of “general revenue tax” in place of “general revenue tax”, you see that it says:
“No bill that provides for a new or increased income tax, sales tax, or value-added tax shall become law unless approved by a two-thirds roll call vote…”
Do you see? This permits Congress to impose a national sales tax or value added tax in addition to the income tax, 3 if 2/3 of both houses agree. [Yes, you read that right.]
Q: How are amendments to the federal Constitution made?
A: Article V of our Constitution provides two method of amending the Constitution:
Q: Which method was used for our existing 27 amendments?
A: The first method was used for all 27 amendments including the Bill of Rights which were introduced into Congress by James Madison. 3
Q: Is there a difference between a constitutional convention, con con, or Article V Convention?
A: These names have been used interchangeably during the last 50 years.
Q: What is a “convention of states”?
A: That is what the people pushing for an Article V convention now call it.
Q: Who is behind this push for an Art. V convention?
A: The push to impose a new Constitution by means of an Article V convention (and using a “balanced budget” amendment as justification) started in 1963 with the Ford and Rockefeller Foundations. 1 Today, it is pushed by:
Q: Why do they want an Article V Convention?
A: The only way to get rid of our existing Constitution and Bill of Rights is to have an Article V convention where they can re-write our Constitution. Jordan Sillars, Communications Director for Michael Farris’ “Convention of States”, said:
“… 3. I think the majority of Americans are too lazy to elect honest politicians. But I think some men and women could be found who are morally and intellectually capable of re-writing the Constitution…” [boldface mine].
Q: How can they impose a new constitution if ¾ of the States don’t agree to it?
A: Only amendments require ratification by ¾ of the States (see Art. V). But a new constitution would have its own new method of ratification – it can be whatever the drafters want. For example, the proposed Constitution for the Newstates of America is ratified by a referendum called by the President.
Q: Can a convention be stopped from proposing a new Constitution?
A: No. Once the delegates are duly appointed & assembled, they are acting under the inherent authority of A People to alter or abolish their form of government [Declaration of Independence, 2nd para]; and have the sovereign power to do whatever they want at the convention.
Q: Is this what happened at the Federal Convention of 1787?
A: Yes. Pursuant to Article XIII of The Articles of Confederation, the Continental Congress resolved on February 21, 1787 (p 71-74) to call a convention to be held at Philadelphia “for the sole and express purpose of revising the Articles of Confederation”. But the delegates ignored this limitation and wrote a new Constitution. Because of this inherent authority of delegates, it is impossible to stop it from happening at another convention. And George Washington, James Madison, Ben Franklin, and Alexander Hamilton won’t be there to protect you.
Q: Did the delegates at the Convention of 1787 introduce a new mode of ratification for the new Constitution?
A: Yes. The Articles of Confederation required the approval of all 13 States for amendments to the Articles to be ratified. But the new Constitution provided it would become effective if only 9 of the 13 States ratified it (Art. VII, cl. 1, U.S. Constitution).
Q: Who would be delegates at a Convention?
A: Either Congress appoints whomever they want; or State governments appoint whomever they want.
Q: Who would be chairman at a convention?
A: We don’t know. But chairmen have lots of power – and George Washington won’t be chairman.
Q: But if the States appoint the delegates, won’t a convention be safe?
A: Who controls your State? They will be the ones who choose the delegates if Congress permits the States to appoint delegates. Are the people who control your State virtuous, wise, honest, and true? [Tell PH if they are, so she can move there.]
Q: But aren’t the States the ones to rein in the federal government?
A: They should have been, but the States have become major consumers of federal funding. Federal funds make up almost 35% of the States’ annual budgets. The States don’t want to rein in the feds – they don’t want to lose their federal funding.
Q: Did Thomas Jefferson say the federal Constitution should be amended every 20 years?
A: No! In his letter to Samuel Kercheval of July 12, 1816, Jefferson wrote about the Constitution for the State of Virginia, which he said needed major revision. And remember James Madison’s words in Federalist No. 45 (3rd para from the end):
“The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce … The powers reserved to the several States will extend to all the objects which … concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State.” [boldface mine]
The powers delegated to the feds are “few and defined” – what’s to amend? All else is reserved to the States or the People – so State Constitutions would need more frequent amendments. Do you see?
Q: Did Alexander Hamilton say in Federalist No 85 (next to last para) that a convention is safe?
A: No! He said, respecting the ratification of amendments, that we “may safely rely on the disposition of the State legislatures to erect barriers against the encroachments of the national authority”. But today, our State legislatures don’t protect us from federal encroachments because:
Q: Did Our Framers – the ones who signed The Constitution – think conventions a fine idea?
“Conventions are serious things, and ought not to be repeated.”
As the White House scrambles to get people signed up for health insurance before the March 31 deadline, many uninsured Americans say they are still planning to take their chances and remain without coverage.
A new study by Bankrate.com shows that about one third of uninsured Americans are going to remain without coverage and opt to pay the penalty.
The survey results suggest that the administration’s outreach to uninsured people may be falling short, with more than half of people without insurance unaware of the March 31 deadline—and even more unaware of subsidies that could make their policies more affordable.
Bankrate surveyed 3,005 people and found that 41 percent of those who were uninsured said they plan to stay uninsured because they think that health insurance is too costly. Meanwhile, about 70 percent said they were unaware of subsidies available under the new law that could make their health plans more affordable.
The study’s findings are worrisome for the Obama administration since the key goal of the president’s health care law was to extend access to health coverage for the uninsured.
A separate study by the McKinsey consulting firm found just 27 percent of Obamacare enrollees were uninsured. That means that the majority of those signing up for Obamacare had previous insurance of some kind—whether they were kicked off their old policies, or they found a better deal on the exchanges. Though not confirmed by the White House, if accurate, that could mean the law is failing to meet its intended goal.
Gary Cohen, an official for the Centers for Medicare and Medicaid Services said the administration has not been tracking how many of the Obamacare enrollees were previously uninsured.
“For many Americans opting out of Obamacare is the best decision they can make, but it’s important that they do it the right way—just refusing to buy health insurance and not having another way to pay for catastrophic medical expenses is a mistake,” Sean Parnell, author of the newly-released The Self-Pay Patient, told Breitbart News. “People who want to opt out should be looking at alternatives to conventional health insurance, such as joining a health care sharing ministry or purchasing a fixed benefits policy.”
Parnell also strongly advises Americans against opting out and simply paying the “list” price for medical visits and prescription drugs without shopping around, or by relying solely on the local hospital emergency room for routine medical care.
“This approach leaves people who opt out vulnerable to sky-high medical expenses at inflated ‘list’ or ‘chargemaster’ rates, and can result in an inability to obtain needed care because of cost,” Parnell writes on his blog, selfpaypatient.com.
Instead, Parnell recommends the following eight options for those who have opted out of ObamaCare:
1. Join a health care sharing ministry, which are voluntary, charitable membership organizations that share medical expenses among the membership.
Parnell states that Samaritan Ministries, Christian Healthcare Ministries, and Christian Care Ministry are open to practicing Christians, while Liberty HealthShare is open to those who are committed to religious liberty.
Healthcare sharing ministries “operate entirely outside of ObamaCare’s regulations, and typically offer benefits for about half the cost of similar health insurance,” says Parnell. “Members are also exempt from having to pay the tax for being uninsured.”
Published on Mar 5, 2014
In today’s video, Christopher Greene of AMTV reports that States are beginning to secede from the Union.
Houston (CBS HOUSTON) – As Texas celebrated its annual “Texas Independence Day,” many in the state’s government leadership and ongoing secession movement say Texas is finally preparing to become an “independent nation.”
The 178th anniversary of the 59 settlers’ signing of the Texas Declaration of Independence commemorates the Lone Star State’s March 2, 1836 break from Mexico to create the Republic of Texas. With the Alamo famously under siege, the delegates declared their independence and today the only state that ever won a war to become its own country celebrates March 2 as its own official “national” holiday.
The U.S. brought Texas in as the 28th state of the Union in an event known as the Texas Annexation of 1845.
But recent rhetoric from anti-tax Tea Partiers, libertarians and state officials alike suggests that the secession movement may be moving a step beyond parties and re-enactments, The Inquisitr reported.
Texas Attorney General candidate Barry Smitherman has openly expressed the possibility of Texas secession.
Texas Independence Day is not only about celebrating separation from Mexico and becoming its own nation for a time. According to some, the Texas secession movement uses it as a time to discuss having Texas secede from the United States.
In a related report by The Inquisitr, most people would call efforts to have Texas secede illegal, but a careful reading of the Texas v. White Supreme Court ruling on the Texas secession during the Civil War era seems to leave a little bit of wiggle room.
Most people in the state celebrate Texas Independence Day with parties and re-enactments, but others point to the political movement still pushing for a Texas secession. For example, Texas Attorney General candidate Barry Smitherman openly says seceding is still a possibility:
“Generally speaking, we have made great progress in becoming an independent nation, an ‘island nation’ if you will, and I think we want to continue down that path so that if the rest of the country falls apart, Texas can operate as a stand-alone entity with energy, food, water and roads as if we were a closed-loop system.”
Larry Kilgore is in the running to become Texas’ governor and he believes a “U.S. economic collapse cannot be avoided” and that the solution is for “”Texas to secede now or we will sink too.” Still, his chances at succeeding in his bid for the governorship are said to be relatively low compared to other candidates.
WESTMINSTER, Md. (WJZ) — A tale of two Marylands: Western Maryland and the rest of the state. Fed up with high taxes and gun control, some people want to break away and go it alone.
Mary Bubala explains why they’re trying to form their own state.
There’s a storm brewing over the beautiful mountains and valleys of Western Maryland. More and more people in those five counties say Governor Martin O’Malley is out of touch and they want to break away from the rest of the state.
“I can’t imagine Maryland without Western Maryland,” said Governor Martin O’Malley.
“Do you actually care about your citizens?” questioned Rob Parr.
“I certainly don’t live in a bubble and I go around the state all the time,” O’Malley said.
“Why don’t you want to listen to people that you don’t agree with?” said Suzanne Olden.
“I spend my whole day listening,” O’Malley said.
Scott Strzelczyk, Suzanne Olden and Rob Parr are part of a growing group that wants to rip Maryland in two, creating the nation’s 51st state. They met recently at O’Lordan’s Irish Pub in Westminster to tell WJZ they’re fed up with politics as usual in Annapolis.
“If your vote doesn’t count, it’s the same as having no vote. We’re not free,” Strzelczyk said. “We’re doing exactly what they did in 1776. I just simply want to live as a free human being with limited government intrusion in my life and that’s really why I do this.”
A push by frustrated western Maryland residents to part ways with their state is gaining momentum as the initiative turns to social media to get its message out.
Residents in Garrett, Allegany, Washington, Frederick and Carroll County, for months have been pushing an initiative to secede from the state and form a new one, called Western Maryland. Among the biggest problems the group has with Maryland are new gun restrictions, tax increases and what they call unfair district lines the group claims unfairly favor Democrats.
The western Maryland initiative now has nearly 9,000 Facebook “likes” since it was formed in July 2013. Activist Scott Strzelczyk started the Facebook page as a way to bring dissatisfied residents together.
“Here at the state level, we’re controlled by a single party – Democrats – and we feel we have no other recourse,” he has told Fox News. “We’re sick and tired of being sick and tired.”
They also have a beef with the high-crime city of Baltimore.
“Little mystery why this is the case,” the group states. “We don’t want our tax dollars going to Baltimore City or other parts of the state to support the same old failed policies. The solution is simple. We want our own state.”
GREELEY, Colo. — If you mention the word “secession” most people think of the South during the Civil War. But today, a new movement is gaining steam because of frustration over a growing, out-of-control federal government.
A number of conservative, rural Americans are taking about seceding and creating their own states, meaning a new map of the United States of America could include the following:
These are real movements gaining traction with voters across the country. Jeffrey Hare runs the 51st State Initiative in Colorado, an effort to fight an out-of-control legislature trying to ram big government policies down the throats of voters.
“We’re at this point of irreconcilable differences,” Hare told CBN News.
Secessionist talk has filled town hall meetings and the divide discussed is not just ideological.
“It’s predominately left versus right, but it’s urban versus rural because you typically find more typical conservative values in rural America,” Hare said.
An Attack on Colorado?
That’s the crux of the issue. Rural Americans across many states feel they’re not being heard. Their laundry list is long and at the top of that list are stricter gun control laws.
According to Weld County, Colo., Sheriff John Cooke, the state legislature is out of control.
“They are out of touch with rural Colorado,” he said. “There is an attack on rural Colorado and it’s not just on gun control laws. It’s on several of the other bills that they passed.”
Government mandates on renewable energy, environmental policies restricting oil and gas drilling, and controversial social issues like gay marriage have also led to this divide and talk of secession.
Organizers want to create “North Colorado,” an idea that went to voters in 11 counties this past fall. But not everyone in Colorado thinks secession is a great idea.
“I don’t think that’s necessarily the way to make something happen within the area you live,” Colorado resident Greg Howe told CBN News. “You’re supposed to work within our electoral services.”
The so-called secession movement in Colorado had mixed results this past November. Some counties approved it. Others didn’t.
But the organizers of the 51st State Initiative are undaunted, saying this type of movement takes time.
“Movements take a while; education takes time,” Hare said. “People do have a hard time saying ,’I want to live in a different state,’ even though physically they live in the same house.”
“It’s hard for them since their lives have been Coloradoans,” he explained. “Their whole lives to say that ‘I’m going to be a new Coloradoan’ or ‘I want to live in the state of liberty’ or something different.”
Citizens for Tax Justice looked at 288 profitable Fortune 500 companies and said that 26 of them – including Boeing Co (BA.N), General Electric Co (GE.N) and Verizon Communications Inc (VZ.N) – paid no federal income tax in the five-year period.
The group also said that 111 of the 288 companies paid no federal income tax in at least one of the five years measured.
In a reflection of how the tax code’s complexity leaves many issues open to question, corporations sometimes dispute the way Citizens for Tax Justice calculates its numbers.
Some of the companies singled out took exception to the findings. GE spokesman Seth Martin said: “For each year cited by Citizens for Tax Justice, GE paid income taxes in the US, as well as billions in other state, local and federal taxes in the US.”
He added, “CTJ inaccurately uses the current tax provision – a book accounting number – to make definitive statements about our U.S. income taxes. This is not the same as the cash income tax that we pay for a given year.”
A key player in Washington’s tax debate, Citizens for Tax Justice regularly issues studies making similar findings about corporate taxes. U.S. lawmakers often cite them in criticizing the tax code as too complex and riddled with loopholes.
Despite complaints about it from across the political spectrum, the tax code seldom changes. It has not been thoroughly overhauled in 27 years. Congress is unlikely to do that in 2014, said Senate Republican Leader Mitch McConnell.
“I have no hope for that happening this year,” he told reporters at the US Capitol on Tuesday, blaming lawmakers’ stubborn fiscal gridlock on Democrats seeking tax increases.
Republican Representative Dave Camp, who heads the top tax-writing committee in the House of Representatives, is slated to unveil tax reform draft legislation on Wednesday, though it is widely expected to sit on the shelf with previous such drafts.
One of the main obstacles to reform is the abundance of tax breaks in the code that benefit corporations and individuals, lowering the effective tax rates of both and giving them ample reason to resist tax changes that would harm their interests.
Boeing spokesman Chaz Bickers said the aerospace manufacturer’s tax bills are largely deferred until it starts generating revenue from airplane sales. “We play by the rules. We pay our taxes,” he said, adding Boeing’s total effective tax rate for 2013 was 26.4 percent.
Verizon spokesman Bob Varettoni said the telecommunications group complies with all tax laws and pays its fair share of taxes. He said Verizon paid more than $2.9 billion in income taxes from 2008 to 2012.
Voice of Russia, Reuters
The biggest issue facing the American economy, and our political system, is the gradual descent of the middle class into proletarian status. This process, which has been going on intermittently since the 1970s, has worsened considerably over the past five years, and threatens to turn this century into one marked by downward mobility.
The decline has less to do with the power of the “one percent” per se than with the drying up of opportunity amid what is seen on Wall Street and in the White House as a sustained recovery. Despite President Obama’s rhetorical devotion to reducing inequality, it has widened significantly under his watch. Not only did the income of the middle 60% of households drop between 2010 and 2012 while that of the top 20% rose, the income of the middle 60% declined by a greater percentage than the poorest quintile. The middle 60% of earners’ share of the national pie has fallen from 53% in 1970 to 45% in 2012.
This group, what I call the yeoman class — the small business owners, the suburban homeowners , the family farmers or skilled construction tradespeople– is increasingly endangered. Once the dominant class in America, it is clearly shrinking: In the four decades since 1971 the percentage of Americans earning between two-thirds and twice the national median income has dropped from 61% to 51% of the population, according to Pew.
Roughly one in three people born into middle class-households , those between the 30th and 70th percentiles of income, now fall out of that status as adults.
Neither party has a reasonable program to halt the decline of the middle class. Previous generations of liberals — say Walter Reuther, Hubert Humphrey, Harry Truman, Pat Brown — recognized broad-based economic growth was a necessary precursor to upward mobility and social justice. However, many in the new wave of progressives engage in fantastical economics built around such things as “urban density” and “green jobs,” while adopting policies that restrict growth in manufacturing, energy and housing. When all else fails, some, like Oregon’s John Kitzhaber, try to change the topic by advocating shifting emphasis from measures of economic growth to “happiness.”
Feb. 21, 2014, 5:00 a.m. EST
President Barack Obama plans to ask Congress in early March, as part of his fiscal 2015 budget, to reduce some of the tax advantages for employer-sponsored retirement plans for higher-income earners, according to published reports.
Plus, the president wants to limit the value of all tax deductions, defined contribution exclusions and IRA deductions to 28% of income — and include an overall cap on all retirement accounts, including pensions, that could bring in $1 billion a year in new tax revenue, according to a Pensions & Investments report. Read Companies bracing for 1-2 retirement punch .
According to the report, the proposals are designed to direct more of the tax preference for retirement savings toward getting more low- and middle-income people into the habit of saving.
Based on current tax brackets, Pensions & Investments reported that the 28% limit would reduce the tax advantages of retirement savings for people earning more than $183,000 or couples earning more than $225,000. And the overall cap for all tax-preferred retirement accounts would limit them to providing an annual retirement income of $205,000, which would currently cap tax-preferred accounts at $3.4 million, but could go lower as interest rates rise.
So, who might feel the effects of this proposal? Largely, the top 5% of tax payers. According to the Tax Policy Center, a partnership between the Urban Institute and Brookings Institution, there are about 6.07 million Americans who earned above $200,000 in 2011 and they make up the top 4.2% of taxpayers, according to published reports. Read more about the president’s tax proposal here: Who makes more than $250k, and are they rich?
And what do experts have to say about what the president might propose? In the main, they say the rich need not worry that their tax breaks for saving for retirement will be cut.
“We’ve heard these kinds of proposals being discussed in policy circles for a couple of years now,” said Skip Schweiss, president of TD Ameritrade Trust Co. and managing director of TD Ameritrade Institutional. “It would not surprise me to see these ideas become more formalized through President Obama’s 2015 budget proposal.”
But even though experts expect the president to propose reductions to some of the tax advantages for employer-sponsored retirement plans for higher-income earners, few expect any congressional action. “Given the congressional divide, it’s hard to see something like this becoming law, but of course one never knows,” said Schweiss.
Steve Forbes, Forbes Staff
Lawsuits are certainly one possible avenue to take, but a slow one–which is what the White House is counting on. It will do what it wants, and by the time an unfavorable decision is handed down, it will have done many other things. It will also find ways to circumvent such a decision or just ignore it altogether.
How will the Administration act when, as is likely, the Supreme Court delivers an adverse ruling concerning the President’s appointment of members to the National Labor Relations Board when the Senate wasn’t technically in recess? Obama’s appointees went on to make rulings that were harmful to business. Of course, the
Administration will promise to comply and will then pull who knows what cards it has up its sleeve to make an end-run around the decision.
The IRS got caught singling out conservative groups for harassment–and nothing was done. The President, with a straight face, told Fox News’ Bill O’Reilly that there wasn’t a “smidgen” of evidence of any corruption, and the Justice Department has made clear it’s deep-sixing any serious probe. But even worse is the fact that the IRS is readying regulation that will make it legal to deny tax exemptions to predominantly conservative groups, while it turns a blind eye to organizations more friendly to the Administration’s Big Government agenda.
To add insult to injury, the new IRS commissioner has decreed that the agency will pay $62 million in bonuses, declaring, “I firmly believe that this investment in our employees will directly benefit taxpayers and the tax system.”
Robert W. Wood, Contributor
America is a great land and lures immigrants worldwide, yet record numbers of U.S. citizens and permanent residents are giving up their citizenship or residency. For all the immigrant arrivals the trickle the other direction is increasing. The number is still small, with the “published” expatriates for the quarter 630 for the last quarter of 2013.
That brings the total number to 2,999 for all of 2013. The previous record high for a year was 1,781 set in 2011. It’s a 221% increase over the 932 who left in 2012. You can call it a shaming or a public record, but the Treasury Department is required to publish a quarterly list of Americans who renounced their U.S. Citizenship or terminated their long-term U.S. residency. The public outing puts Americans on notice who relinquished their rights.
Those seem like tiny numbers, yet the total thus far for 2013 is 2,369. See Number of Taxpayers Who Renounced U.S. Citizenship Skyrockets to All-Time Record High, quoting Andrew Mitchel. Under U.S. tax law, it is not relevant why someone expatriates. Whether the expatriation was motivated by tax avoidance or something else used to matter, but the law was changed in 2004.
Since then, the tax and other consequences do not depend on why one leaves. Yet after Facebook co-founder Eduardo Saverin departed permanently for Singapore with his Facebook IPO riches, there was an angry backlash. Mr. Saverin’s post-Facebook fly-away prompted such outrage that Senators Chuck Schumer and Bob Casey introduced a bill to double the exit tax to 30% for anyone leaving the U.S. for tax reasons.
So far, that bill remains unpassed. Meantime, are people following Tina Turner’s lead? No, and not Eduardo Saverin’s either. Most expatriations are probably motivated primarily by factors such as family and convenience. Many people like Ms. Turner have built a life somewhere else and may not plan to need a U.S. passport.