I want to give you a heads up that there won’t be a Weekly Update next week. The TPA staff will be enjoying Thanksgiving and getting a much-needed break. We will be releasing our Taxpayer Turkeys next week, so don’t miss that. This year’s Turkeys are two senators (one Democrat and one Republican) plus we have two officials from Baltimore, Maryland, who will also be Turkeys. We will of course be following all developments with the massive multi trillion-dollar spending bill making its way through Congress. Enjoy your Thanksgiving!
Don’t Blame the Referee
My sports teams have been horrendous this year. As much as I want to blame the referees, I know that ultimately it’s the players and the coaches that are responsible for the losses. You may have heard that the House of Representatives was waiting for the Congressional Budget Office (CBO) to “score” the Build Back Better (BBB) multi-trillion dollar spending plan. What is CBO and what is a “score?” The CBO is the congressional referee to determine how much a piece of legislation costs. According to CBO’s website, “Since 1975, CBO has produced independent analyses of budgetary and economic issues to support the Congressional budget process. Each year, the agency’s economists and budget analysts produce dozens of reports and hundreds of cost estimates for proposed legislation. CBO is strictly nonpartisan; conducts objective, impartial analysis; and hires its employees solely on the basis of professional competence without regard to political affiliation. CBO does not make policy recommendations, and each report and cost estimate summarizes the methodology underlying the analysis.” When they “score” legislation they are giving a financial estimate. CBO has been analyzing the Build Back Better legislation to determine whether or not the legislation pays for itself. Late Thursday, we found out that even under the best case scenario of increased tax enforcement, BBB will still add hundreds of billions of dollars to the national debt. Quite frankly, TPA wouldn’t care if BBB did pay for itself, it is full of massive amounts of spending and tax increases.
On Tuesday, White House officials took a shot at CBO and said that its analysts are inexperienced. The administration’s pre-emptive criticism of the CBO is shameful and establishes a really bad precedent. This unprovoked criticism is a clear sign that the White House knew BBB will not pay for itself and will exacerbate the government’s disastrous spending habits. In fact, despite Congress and the administration marketing the bill as a $1.8 trillion package, analysis from the Committee for a Responsible Federal Budget shows that it could cost upwards of $4 trillion if temporary provisions are made permanent, as many of its proponents have called for. With the nation experiencing historically high deficits, runaway inflation, and consistently disappointing job numbers, the rush to force this bill through is grossly irresponsible. Policy makers have no idea what kind of impact such a sweeping package will have yet. Undermining the CBO is a nakedly partisan move designed to advance the best interests of career politicians, instead of the fiscal health of the nation.
Don’t Touch My (or anybody’s) IRA
One of the provisions in BBB would be to change Individual Retirement Accounts (IRAs). One option that Americans have had available for decades to help them retire on their own schedule is to invest in a Roth IRA. Named for former Sen. William Roth (D-Del.), these accounts provide retirement plans where the money going in is already taxed, and growth and most qualified withdrawals from the account are tax-free. They were designed to be a better form of retirement security for working families than traditional investments. It is critical for many future retirees to know they will have a tax-free option at the end of the road. Unfortunately, Roth IRAs – and those who utilize them – now find themselves under attack by lawmakers in Washington. Sen. Ron Wyden (D-Ore.) is reintroducing legislation that would severely restrict these crucial retirement savings vehicles. The Wyden proposal would limit the amount of money that can be put into these IRAs and cap the amount of allowable growth in the accounts over time. It would also limit the ability for many to move money from sub-optimal retirement accounts into a Roth IRA.
Last week, we joined with 10 other groups to oppose the changes. In part, the letter read:
"If passed, Biden’s IRA changes would ban many after-tax contributions from being converted to a Roth IRA for investors making under $400,000 per year, making this a potential violation of President Biden's tax pledge. Worst of all, Biden’s IRA changes would result in additional audits, retroactive taxation, and a list of accounts over $2.5 million – likely the next target when Congress needs more money. Biden’s IRA changes would create insecure retirements for millions. Since their creation in 1998, Roth IRAs have enjoyed strong bipartisan support in Congress. They are also popular with Americans, with the total value of assets in Roth IRAs quintupling from 2008 to 2018. Thanks to the financial benefits Roth IRAs provide retirement savers, they have become the bedrock of America’s retirement system. It is estimated that more than 56 percent of Americans nationally invest in IRAs. A Joint Economic Committee found that IRAs contribute to a 'high national saving rate [which] allows long-term interest rates to fall, creating an environment conducive to economic growth.' Rather than supporting programs that stimulate our economy, President Biden and the Democrats want to destroy IRAs. Former U.S. Senator Max Baucus (D-Mont.) emphasized that changes to retirement should be done in a bipartisan manner, recalling how he and Senator Chuck Grassley (R-Iowa) worked together 'on Republican bills, Democratic bills and bipartisan bills.
President Biden and congressional Democrats are attempting to pass their massive spending bill at the expense of hardworking Americans’ retirement savings on a completely partisan basis. This Democrat tax hike on the middle class must be stopped. On behalf of the millions of Americans worried more than ever about their retirement, we thank you for your leadership and ask that you ensure these dangerous provisions never become law – protecting retirement savers of all income levels.”
BLOGS:
Monday: The Democrats Desperate Attempt at a Wealth Tax
Tuesday: Global Corporate Minimum Tax is a Step Backward
Wednesday: Taxpayer Watchdog Criticizes White House for Attacking the Non-Partisan Congressional Budget Office
Thursday: TPA Sends Letter Urging Congress to Oppose Build Back Better Act
Friday: R Street Institute Report Details Better Approach to Tech Policy
MEDIA:
November 15, 2021: WBFF Fox45 (Baltimore, Md.) interviewed me about the causes of inflation.
November 15, 2021: The Center Square ran TPA’s ope-d, “Global corporate minimum tax is a step backward.”
November 16, 2021: WBFF Fox45 (Baltimore, Md.) quoted TPA in their story, “Mayor Scott announces $55M in federal spending for workforce training, economic recovery.”
November 17, 2021: The Highland County Press (Hillsboro, Ohio) ran TPA’s press release, “Taxpayers Protection Alliance slams White House for undermining Congressional Budget Office.”
November 18, 2021: WBFF Fox45 (Baltimore, Md.) interviewed me about the tax increases in the Build Back Better bill.
November 18, 2021: I appeared on WBOB 600 AM (Jacksonville, Fla.) to talk about tax increase in the Build Back Better bill.
Have a great weekend!
