Taxes

October 1, 2013

Pennsylvania’s Proposed Women’s Health Agenda

Kate Michelman

Kate Michelman discussing strategy with women’s health care advocates and members of the General Assembly Health Care Agenda Caucus.

Yesterday (Monday, September 30, 2013), I attended a two-hour meeting with Pennsylvania’s House and Senate members of the joint Women’s Health Agenda Caucus led by Representative Dan Frankel of Pittsburgh. Some of the advocacy groups attending the meeting included the Women’s Law Project (WLP), Women Vote PA, and members of the Pennsylvanians for Choice coalition including Pennsylvania NOW whom I represented.

For a very long time Pennsylvania has focused on restricting women’s access to abortion services – currently accounting for over 1270 pages of legislation and regulations in the state.  This wrong-headed approach to health assumes that women’s sole need is to protect them from safe, legal access to decent abortion care services.  In other words, the state has wrong-headedly been crafting laws and regulations to deny access to abortion, sending more and more women to the back alleys similar to the Gosnell clinic and ignoring the broader issues of women’s health equity.

Women’s concerns about their health are broadly based in bias based on gender. Terry L. Fromson, Amal Bass, Carol E. Tracy, Susan Frietsche of the Women’s Law Project  created a report entitled Through the Lens of Equality: Eliminating Sex Bias to Improve the Health of Pennsylvania’s Women in 2012.  The WLP is Pennsylvania’s feminist legal organization that engages in litigation, advocacy, and education to ensure women’s equality and treatment in Pennsylvania. This report set the context for yesterday’s meeting.  The WLP framed the health care agenda as follows in this report and in the meeting this morning:

The legal and social status of American women has changed dramatically in the last fifty years. Half a century ago, it was legal to segregate jobs by sex, to refuse to hire or promote on the basis of a person’s sex, to fire women who became pregnant, and to limit the number of women admitted to professional schools such as law and medicine. Sexual and domestic violence were hidden from public view and public policy. Abortion was illegal and the birth control pill was not yet on the market. Today, women have taken their place in the working world and educational opportunities for women have expanded exponentially. Sexual and domestic violence are recognized as crimes and some resources are available to its victims. Abortion is legal and birth control is available.

Despite these advances, deeply embedded cultural biases and stereotypes about women’s place in society continue to impede women’s equal participation in society. In our homes and communities women are subjected to violence, poverty, and the burden of care taking responsibilities. In the workplace, women are paid less than men for the same work, remain concentrated in stereotypically female low-paying occupations, are subjected to sexual harassment and discrimination on the basis of pregnancy and care giving, and are denied advancement to managerial and higher paying positions. In school, young women are denied their fair share of sports opportunities and are sexually harassed and violated. Women are denied essential reproductive health care and subjected to discrimination in access to insurance coverage. Women pay more than men for the same coverage, and pregnancy is a preexisting condition that often denies pregnant women access to insurance coverage and therefore maternity care.  Access to abortion has been limited by burdensome legislative requirements, and providers and patients have been terrorized by an increasingly violent opposition. Attacks on access to contraceptive services have grown.

While many laws have been adopted to eliminate sex discrimination at work and at school, gaps persist that must be filled and enforcement needs to be strengthened. This is particularly true in Pennsylvania. While some Pennsylvania cities have outlawed employment discrimination on the basis of care-giving responsibilities and provide other accommodations for women who work, the Pennsylvania legislature has failed to adopt a statewide prohibition on discrimination on the basis of caregiver status or to provide family leave for caregivers. In Pennsylvania, the law permits insurers to price the cost of health insurance higher for women than for men, resulting in women paying more for individual health insurance policies and small employers paying more for health insurance for a predominantly female workforce. Pennsylvania’s sexual assault laws have for the most part eliminated discriminatory provisions, but the myths and stereotypes that continue to infect the criminal justice system hinder the investigation and prosecution of these crimes. The health care perspective on domestic violence and sexual assault is far too limited. Sexual assault is treated as a health care matter primarily in the immediate aftermath of a rape, even though the physical and emotional health consequences can be long lasting. Although a number of health care providers recognize that domestic violence is also a health issue, screening for domestic violence in health care settings is not universal. Poverty, which disproportionately impacts women, exacerbates the impact of sex bias in all of these realms….

Pennsylvania, with 6.5 million women, has consistently been found deficient in national studies on women’s health care measures. In their 2010 health report card, the National Women’s Law Center and Oregon Health & Science University placed Pennsylvania 32 among the 50 states and graded it unsatisfactory with respect to the status of women’s health….

To alleviate women’s health problems, it is necessary to eliminate adverse experiences — discrimination and bias — early in life and throughout life — and to improve access to health care, with an emphasis on care essential to women (pp. x-xii).

Representative Frankel heard this call to refocus the legislature from attacking women’s reproductive health to focusing — just like New York state’s “10 Point Plan for Women’s Equality” — on redirecting legislation in the General Assembly towards a women’s health equity agenda. So yesterday, almost 20 legislators from both houses attended a meeting with advocates seeking to improve women’s lives and health through a broad review and revision of Pennsylvania law.  The agenda covers reproductive health, women’s economic security, and women’s safety.

The ideas for change come from real-life stories of women in the state.  Calls to service agencies. Cries for help on hot lines. Requests for advocacy. And of course lots of research to back up the anecdotal stories.  The 24 suggested changes to Pennsylvania law that were presented are in areas where either no legislation has been introduced or where legislation to improve the bias are lagging or need to be revisited.  We, as advocates, understand that there are other areas of concern, but believe these health care agenda items are a good start.

Some of these ideas are conceptual at this point. Some have some preliminary model wording for new legislation, and some are already in the works.  Here’s the agenda:

Protect and Expand Women’s Reproductive Health Rights

  1. Pregnancy Accommodations:  Require employers to provide accommodations to pregnant employees with temporary pregnancy-related conditions to allow workers to remain employed throughout their pregnancies while imposing minimal burdens on employers.
  2. Support for Breastfeeding Mothers in the Workplace: Require all employers to provide compensated break time and a private, sanitary (not a bathroom) for all employees who need to express milk.
  3. Buffer Zones:  Enact a statewide reproductive health care clinic buffer zone statute to protect safe access to essential health care.
  4. Inmate Shackling: Strengthen pregnant inmate shackling law (Act 45 of 2010) to cover the entire pregnancy and a reasonable post-partum period for mother-child bonding and to eliminate the tasering of any woman known to be pregnant.
  5. Medical Professional Conscientious Right to Refuse to Deliver Medically Inaccurate Information: Protect physician-patient relationships from political intrusion.

    Improve Women’s Economic Security

  6. TANF (Temporary Assistance to Needy Families) Grant Amount: Increase TANF cash assistance grant levels.
  7. TANF Asset Limit: Increase the TANF eligibility asset limit to encourage saving and financial independence.
  8. Earned Income Disregard: Increase the earned income disregard and apply it to applicants as well as recipients.  FYI, the earned income disregard allows very-low income workers to continue receiving TANF, food stamps, and Medicaid if they make 50% or less of the poverty level.  This proposed legislation would raise this “disregard” level to 75% and would apply to applicants as well as recipients.
  9. Childcare Works Waiting List: Eliminate the childcare works waiting list.
  10. TANF Pre-Application Job Search: Eliminate or modify the TANF pre-application job search requirements.
  11. Minimum Wage: Increase Pennsylvania’s minimum wage from $7.25 to $9.00/hour.
  12. Gender Wage Gap: Strengthen Pennsylvania law to eliminate the 24% gender wage gap by prohibiting retaliation against employees for discussing wages (“pay secrecy”) and closing the “factor other than sex” defense to apply only to bona fide business-related factors.
  13. Family Responsibilities Employment Discrimination: Prohibit family responsibilities discrimination in employment by amending the Pennsylvania Human Relations Act to prohibit family status discrimination in employment pursuant to an expanded definition of familial status to encompass the true scope of familial responsibilities shouldered by employees.
  14. Paid Family and Sick Leave: Require all employers to provide employees with paid family and sick leave
  15. Spousal Pension Benefits: Require spousal consent when a retiring state employee chooses how his or her pension benefits should be paid consistent with federal law protecting each spouse from his or her spouse’s selection of a pension benefit in all privately-sponsored pension plans and laws adopted by other states.
  16. Domestic Worker Protection: Amend Pennsylvania anti-discrimination laws to provide domestic workers protection from employment discrimination
  17. Sexual Harassment: Extend the prohibition on sexual harassment in employment to all employers, even small employers.

    Protect Women’s Personal Safety

  18. Paid Leave for Domestic Violence, Sexual Violence, and Stalking Victims: Require employers to provide paid leave to obtain assistance for and pursue legal protection against domestic and sexual violence and stalking.
  19. Housing Discrimination: Prohibit private and public housing discrimination against domestic violence victims.
  20. Civil Orders of Protection for Sexual Violence and Stalking Victims: Authorize courts to issue civil orders of protection for sex crime and stalking victims.
  21. Absolute Privilege for Student Victims: Protect victims/witnesses of sexual assault who testify in school grievance proceedings from being sued by their harassers.
  22. Human Trafficking: Strengthen Pennsylvania’s criminal statute on human trafficking.
  23. Veterans’ Real Estate Tax Exemption: Amend Pennsylvania law to provide veterans real estate tax exemption for veterans suffering from PTSD (Post-Traumatic Stress Disorder) due to sexual victimization during service and appoint women representatives to the House and Senate Committees on Veteran Affairs and to the Pennsylvania State Veterans Commission.
  24. Voting Reform: Reform voting rules to provide online registration, same day in person registration, early voting, including early in person voting on weekends.

These ideas will be discussed in continuing meetings between members of the General Assembly’s Health Care Agenda Caucus and advocates for women’s equality.  I’ll post more on these issues as this legislative program becomes better defined.

August 30, 2013

IRS Ruling a Victory for Married Same-Sex Couples Across the Country!

Thanks to the U.S. Department of the Treasury and the Internal Revenue Service for doing the right thing on August 29. Those of us who live in states, like Pennsylvania, that have their own version of the Defense of Marriage Act (or a constitutional ban in other states on same-sex marriage) will now, at last, have the full federal economic benefits and protections of marriage as long as you were married somewhere that recognizes your marriage. Meanwhile cases challenging state DOMA’s and constitutional bans in federal court on gay marriage need to go forward. The PA ACLU is leading such a case here in Pennsylvania; this groundswell of support for equality WILL succeed. And like in the Loving v. Virginia case, we will eventually have Freedom to Marry for all consenting adults regardless of sexual orientation.

Come Check out Our NEW Site!

Tara R. Pfeifer, WLP Staff Attorney

The Internal Revenue Service and the Treasury Department announced yesterday that the federal government will recognize the marriages of legally married same-sex couples for all federal tax purposes, regardless of where those couples reside.

This landmark ruling comes on the heels of the United States Supreme Court’s decision in U.S. v. Windsor in which the Court overturned a key provision (Section 3) of the Defense of Marriage Act.  Section 3 defined the terms “marriage” and “spouse” for purposes of federal law as pertaining only to legal unions between one man and one woman.  Yesterday’s announcement clarifies that when it comes to evaluating the federal tax status of same-sex married couples, it is the “place of celebration” – where the wedding took place – that controls, not the state where the couple resides.  Thus, same-sex couples that marry in one of the states where same-sex…

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August 14, 2013

Let’s Strengthen, Not Weaken Social Security

Social Security.  It’s been around for 78 years.  It’s a benefit that everyone (and their family members) who has worked in the United States is eligible to receive. You pay into the system when you are working and then when you retire or become disabled, you, your spouse, and your dependent children receive monthly benefits based on you earned income history.  Currently almost 58 million Americans receive $816 billion annually in Social Security benefits.  Most (70%) are retirees and their family members.  The rest are either disabled (19%) or are survivors (11%) of a deceased spouse or parent who would have otherwise qualified for Social Security.  We all like, expect, and will, if not already, depend upon Social Security to sustain our financial well-being and independence.

Dwight D. Eisenhower Supported Social Security

Yet it is under attack.  And has been for almost a decade.  Until 2005, both political parties fully supported Social Security.  President Dwight D. Eisenhower in a letter to his brother Edgar on November 8, 1954 said:

Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt (you possibly know his background), a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid.

This was right after he responded to a letter to a constituent shortly after signing a bill into law expanding Social Security.  In that letter dated September 30, 1954, President Eisenhower said:

The actual fact is that by and large the productivity of a national economy must [emphasis added], at any given time, support the people then living in the nation. This means that, roughly, the people from twenty to sixty bear the burden of supporting themselves, and in addition, support those from birth to twenty years of age, and those from sixty to eighty.

The Three-Legged Stool

At that point in our history, both sides of the aisle fully supported the idea of Social Security as the third leg of the financial stool (the other two legs being pensions and savings).

Over the years fewer and fewer people have had employment that contained a defined benefit pension.  And fewer people have retirement savings. People need all three legs.  With the other two legs being cut or chipped away at, Social Security remains potentially their only source of income should they retire or become disabled.

The Bush Administration Starts the Attacks on Social Security

The attacks on Social Security really started hard and heavy in 2005 when then President George W. Bush called for the privatization of Social Security and a redesign of Medicare that created the so-called “doughnut hole.”  I first started working on this issue that year, organizing a protest rally on the Penn State University-University Park Campus when Bush came to town to try to tell the Future Farmers of America that Social Security was a lost cause.

Over 500 people were at that protest.  Holding up signs like:

 

2005 Rally at Penn State University Protesting the Privatization of Social Security

Bush is Wrong! Ike was Right! Hands Off My Social Security: 2005 Rally at Penn State University Protesting the Privatization of Social Security

  • Hands Off My Social Security
  • Bush is WRONG!
  • Ike was RIGHT!
Sign at Protest that says: "No! No! No Social Security Privatization Fiddle"

2005 Rally at Penn State University Protesting the Privatization of Social Security

  •  No! No! No Social Security Privatization Fiddle and

 

Banner at 2005 PSU Protest saying: "Social Security: Don't Gamble with Our Future"

Don’t Gamble with Our Future: 2005 Rally at Penn State University Protesting the Privatization of Social Security

  • Social Security: Don’t Gamble with OUR Future (referring to privatizing and placing Social Security payments in the volatile stock market).

Organizations and individuals fought back and Social Security was not privatized but Medicare was compromised when the prescription drug benefits (Part D) were written into law in 2006. This hole forces individuals on Medicare in 2013 to pay 100% of their drug costs once  you reach their Medicare Part D plan’s initial coverage limit of $2,970 and ends when you spend a total of $4,750.

This was the opening gambit to destroy Social Security. These attacks are continuing to this day.  Now it is the Tea Party Republicans who are doing the attacking.  And if they succeed, women and people of color in particular will pay the penalty.

The Seven Principals to Strengthen Social Security

Rather than decimate our safety net that we all paid for and for which we are due, we should be strengthening rather than weakening Social Security. According to StrengthenSocialSecurity.org – a coalition of over 300 national and state organizations representing over 50 million Americans, there are seven principles to fully support and strengthen our Social Security system:

  1. Social Security did not cause the federal deficit; its benefits should not be cut to reduce the deficit.  And anyone who tells you Social Security is going broke is either misinformed or deliberately trying to mislead. The Social Security Trust Fund is viable through 2033.
  2. Social Security should not be privatized in whole or in part.  Unlike Wall St. and the stock market, Social Security is a reliable, risk free source of income. These benefits are guaranteed every month and are adjusted to the rise in the cost of living.
  3. Social Security should not be means-tested.
  4. Congress should act in the coming few years to close Social Security’s funding gap by requiring those who are most able to afford it to pay somewhat more. This means that the cap on payment into Social Security should be lifted for higher income individuals.
  5. Social Security’s retirement age, already scheduled to increase from 65 to 67, should not be raised further. Increasing the retirement age disproportionately affects low-income women. The life expectancy for low-income women has decreased over the last 25 years and they are more likely to have jobs that compromise their health. Increasing the retirement age would amount to a 15% benefit cut for low-income women workers.
  6. Social Security’s benefits should not be reduced, including [benefit-reducing] changes to the COLA or the benefit formula. Republican leaders want to impose a less accurate COLA formula – the chained-CPI. The current COLA (Cost of Living Alliance) formula is based on the Consumer Price Index (CPI) which estimates the price of stuff we need (like food) changes over time.  The chained-CPI assumes that when the prices of something goes up, people will automatically replace it for something cheaper (e.g., beef would be substituted with chicken and maybe even eventually with dog food); therefore the COLA can be calculated at a lower rising level.  That con only work for the short-term since in some cases (e.g., health care) there are no substitutes and for others (e.g., the food example), people either can’t or won’t go that far without compromising their lives. Over a 30-year retirement, that means that a person would be losing a full month’s worth of Social Security every year. For senior women who often don’t have extra savings or a pension, the gap between their regular expenses and what would be covered over time under a chained-CPI would be disastrous.
  7. Social Security’s benefits should be increased for those who are most disadvantaged. This would include low-income workers, LGBTQ families in states that don’t recognize same-sex marriages, college students whose working parent has died, and people who have to drop out of the workforce to provide caregiving to their family members.

Increasing the Benefits for the Most Disadvantaged

I’d like to look at this last principle in more depth by focusing on women and Social Security because women make up the combined majority of people in these four groups.  So, why should benefits for these four groups be increased?

Low Income Workers

Low Income workers are disproportionately made up of women and people of color. Living hand to mouth, this group of working-age people have little ability to build up any retirement savings.  So one leg of the stool is cut very short.  And unlike high-income workers who worked at a company with full benefits, they are less likely to have any retirement pension at all.  The second leg is also cut very short. As a result, nearly 80% of a low-income worker’s retirement income is made up entirely of Social Security benefits.  And because of the cutbacks in Medicare with the aforementioned doughnut hole, this group of retired people – mostly women who live longer – are further squeezed.  This group of retirees, rather than having their livelihood threatened by a chained-CPI reduction should, instead have and enhanced benefit by creating a Special Minimum amount of Social Security benefits for lifetime low-income earners.

In 2012, the National Organization for Women Foundation, the National Committee to Preserve Social Security and Medicare, and the Institute for Women’s Policy Research released a report called “Breaking the Social Security Glass Ceiling: A Proposal on How to Modernize Women’s Benefits.”  This report presents a proposal to enhance this baseline level of Social Security benefits for low-income workers. They suggest improving the Special Minimum Benefit by:

  • Increasing the benefit to equal 150 percent of the aged poverty level for workers with 30 years of credit;
  • Reducing the wages required to receive a year of credit toward the minimum benefit to the amount required for four Social Security credits;
  • Indexing future increases in the minimum benefit to growth in wages rather than the CPI;
  • Providing up to ten family service years of credit toward the computation of the benefit; and
  • Increasing the Supplemental Security Income (aka SSI) general income exclusion to $100 and adjust it in future years for inflation.

LGBTQ Families

In June, the US Supreme Court, in a case known as United States v. Windsor, overturned the federal Defense of Marriage Act. They declared that committed same-sex couples who have had their relationships legally recognized as marriage must receive all of the federal benefits, including Social Security, associated with legally-recognized marriages.

Same-sex couples, who live in states that don’t recognize their marriages, however are currently out of luck.  In the 37 states without marriage equality, same-sex couples and their families are considered legal strangers. A same-sex household with one wage earner forfeits $675 monthly, the equivalent of two months’ worth of groceries for two people.

The Glass Ceiling report makes the following proposal to address continuing discrimination in these 37 states that don’t recognize same-sex marriages:

  • Amend the Social Security Act to define “wife,” and “husband” so that they no longer rely on gender-specific pronouns;
  • Provide eligibility to spousal benefits to individuals who are members of same-sex marriages, domestic partnerships, civil unions, or any other such relationship as the states, by law, may prescribe;
  • Extend to the children of these relationships, benefits under the same terms and conditions as children of heterosexual couples; and
  • Directly address the issue of disparate state-based DOMA laws by declaring that all federal family eligibility determinations under Social Security be exempted from the provisions of state-based Defense of Marriage Acts.

College Students and their Parents

Up until 1981, students attending college whose working parent had died, become disabled, or retired were eligible for Social Security benefits under their parent’s Social Security until they reached the age of 22.  That year, all post-secondary benefits were eliminated.  Most of the recipients of this benefit were disproportionately children of parents in blue-collar jobs, African-Americans, and those with lower incomes than other college students.  As a result of this change in the law, single parents—again most often women—would often defer saving funds for their own retirement in order to assist their kids through college. This decision results either in a a lower level of retirement funds for his/her parent(s) and/or a reduced likelihood of the student attending college if the parent and child are unable to fund the student’s post-secondary education.

The Glass Ceiling report makes the following proposal to address this issue:

  • Reinstate benefits for children of disabled or deceased workers until age 22 when the child is attending a college or vocational school on a full-time basis.

Caregivers

In addition to the disparity in pay between men and women, one of the main reasons women’s Social Security benefits are lower on average than that of men is that they are more likely to take time off from work to care for children or elderly and sick adult family members (spouses, parents, in-laws, and other family members).  The Social Security Administration uses a calculation known as the “average Indexed Monthly earnings primary insurance amount” (aIMe PIa) to calculate the benefit levels of all beneficiaries. Because of the way that the Social Security Administration calculates the benefit level, any temporary interruption in one’s income can significantly reduce how much Social Security a person can receive.

This affects single women as well as married women since both can and do have children and do have other family members that may need some care. Currently the only way to compensate for this care-giving duty is to provide the caregiver a spousal add-on benefit. This unfair treatment of caregivers in the Social Security formula needs to be changed so that we can continue to care for our family members without jeopardizing the financial security of the caregiver.  The Glass Ceiling report also addresses this issue by recommending a change in the way the aIMe PIa is calculated:

  • Compute the AIME PIA by imputing an annual wage for each family service year so that total earnings for the year would equal 50 percent of that year’s average annual wage index. Family service years would be those in which an individual provides care to children under the age of six or to elderly or disabled family members. Up to five family service years could be granted to any worker.

These Improvements are Affordable: With Some Changes

We can pay for these improvements, and simultaneously ensure the solvency of our Social Security system for 75 years or more. Changes to how Social Security could be funded are well-known. We just need to do it!  The funds for these changes are available IF we:

  • Remove the cap on wages subject to the Social Security payroll tax.  Rather than capping employee, employers, and the self-employed person’s payroll taxes on the first  $113,700 of income, the law should be changed to entirely remove this cap and require millionaires and billionaires to pay the same rate as the rest of us.  This one change would provide most of the needed resources.  According to Virginia Reno and Joni Lavery of the National Academy of Social Insurance, “this option [by itself] would eliminate much of Social Security’s current actuarial deficit by producing revenue equal to about 2.17 percent of taxable payroll.”
  • Slowly increase the Social Security contribution rate by 1/20 of one percent over the next 20 years.  This option, according to Reno and Lavery “would provide revenue equal to 1.34 percent of taxable payroll.”
  • Treat all salary deductions like 401(K) plans.  Currently we pay Social Security and Medicare taxes on any retirement plan, such as a 401(K), a 403(b), or a 527 plan.  We do not pay these taxes on that portion of our salary we put aside to pay for any flexible spending account, such as a medical savings account.  If we were to  treat and tax flexible spending accounts just like our retirement plans, Reno and Lavery report that we would provide an about  an additional 0.48 percent of taxable payroll.

These three changes amount to 3.99% of payroll taxes and would fully close the current actuarial deficit (2.67 percent of payroll) according to Reno and Lavery.  The additional 1.32% would fund the proposals to strengthen Social Security as recommended in the Glass Ceiling report without hurting women, people of color, LGBTQ people, caregivers, college student, and low-income families.

The funds are there.  Let’s make it happen. Let’s strengthen, not weaken Social Security for everyone.

 

May 19, 2013

Special Report: IRS Scandal Shakes Washington (OR IS IT?)

I just read this blog by Michael J. Rosen about the extra scrutiny of conservative groups seeking tax-exempt status. I decided to repost his blog with three sets of comments. My comments give thought to three different sets of questions:

  1. What else besides what we’ve heard about might have helped lead to this “scandal?”
  2. Is it really a “scandal?” Do we know?
  3. Is this issue likely to go away soon?

What else might be behind this scandal?

Besides a lack of training and oversight that we’ve heard about, I think another part of this whole problem is the backlog of applications in the non-profit division of the IRS. I talked to them the other day about a non-profit I work with that is attempting to get its 501(c)4 status reinstated due to the 990-N issue. The agent I talked to said that they are getting over 5,000 applications every month and are working on them on a first come, first serve basis.

The IRS website says that with the small staff they have, there is an even greater backlog on applications than what the agent told me. Here’s that IRS statement.

“All [non-profit] applications are sent to the IRS Determinations Office in Cincinnati. This office receives approximately 70,000 applications for tax-exempt status of all kinds each year [that averages out to 5,833 new applicants each month]. This includes applications from section 501(c)(3) and section 501(c)(4) organizations. This office, which includes fewer than 200 people working directly on applications, is primarily responsible for working determination applications.”

The agent helped me to figure out the current status of this VERY SMALL non-profit that I’m working with (if it brings in $400/year for this group, it’s doing well). He told me that the records show that all of the paperwork at our end is basically complete, but the application won’t be reviewed until the office gets to the applications marked as “complete” as of September 2012 (when he says my group officially completed the paperwork). And, directing me to another section of the website, he pointed out that the office is currently working on applications from early May 2012 – i.e., over a 1 year delay in processing!

The aforementioned web page also goes into more detail, from the official IRS viewpoint, of what happened with the Tea Party organizations. It says that approximately 70 Tea Party groups were put into the in-depth “centralized” review; that out of a total of, currently, about 470 organizations being given similar treatment.

Is it a Scandal? Do We Really Know?

A scandal is defined as “a circumstance or action that offends propriety or established moral conceptions or disgraces those associated with it.” A political scandal is “an instance of government wrongdoing” that offends or disgraces those directly associated with that wrongdoing.
In this case, so far, it doesn’t appear to be a scandal that rises to the level of the White House. According to the Washington Post, based on increasing evidence, the IRS issue is very bad press for the Obama administration. According to their report,

If we believe the agency inspector general’s report, a group of employees in a division called the “Determinations Unit…” started giving tea party groups extra scrutiny, were told by agency leadership to knock it off, started doing it again, and then were reined in a second time and told that any further changes to the screening criteria needed to be approved at the highest levels of the agency.

The White House fired the acting director of the agency [this week] on the theory that somebody had to be fired and he was about the only guy they had the power to fire. They’re also instructing the IRS to implement each and every one of the IG’s recommendations to make sure this never happens again.

And from all the evidence obtained so far, there is no evidence of any connection between the “Determinations Unit” and the Obama administration. So unless there is a smoking gun hidden somewhere, there is no political scandal within the White House. Time will tell.

Is this issue likely to go away anytime soon?

No, I personally doubt that the issue will “go away” anytime soon.

Three reasons:

  1. partisan politics to continue attacking Obama’s executive branch;
  2. long history of spying and intrusiveness; and
  3. free-speech issues.

The first issue is purely partisan. Issues that Republicans think will make President Obama look bad are brought up again and again even when the public, to some extent (but not the base) has moved on. Has the Benghazi issue died? How many times will the Republican-dominated House vote to revoke Obamacare before they give up?

The second issue is spying and intrusiveness that, for the first time in a long time, concerns both sides of the aisle. There has been a long history of the feds, usually the FBI, targeting non-profits. Think of the Friends (Quakers) peace-related work for example or the Communist-baiting of the 1950s. Usually it’s the more progressive, left-leaning groups that are targeted. These groups have a long memory and I think may, in this case, support the concerns raised in this non-profit scrutiny case. And since there were progressive groups in this list of targeted non-profits, both sides have some ammunition to push back against the actions of the IRS.

The third is a First Amendment issue. Combine these IRS actions with the free press concerns over the Justice Department’s review of press reporters’ phone logs; both sides have screamed NO. What you have here are two different departments of the executive branch allegedly intruding on the First Amendment: one department—the IRS—may be attacking an individual’s free speech rights and another department—the Justice Department—may be attacking freedom of the press. Both protections are contained within the First Amendment of the US Constitution.

So no, based on all three routes of concern, I don’t think this issue will go away anytime soon.

Michael Rosen Says...

This week, the US Internal Revenue Service acknowledged and apologized for behavior that had long been rumored. The IRS improperly targeted for extra scrutiny conservative groups seeking tax-exempt status.

IRS logoThe IRS did not ultimately deny tax-exempt status to a single group receiving extra scrutiny. Some say this proves that the actions of the IRS were baseless.

The scandal has now shaken the nation’s capital:

President Barack Obama directed Jack Lew, Secretary of the Treasury, to request the resignation of Steven Miller, Acting IRS Commissioner.

Miller resigned and Lew accepted the resignation.

The Justice Department has initiated a criminal investigation.

Exercising its oversight responsibility, Congress has begun its own probe of the IRS scandal.

Obama addressed the nation on television saying, “It’s inexcusable and Americans are right to be angry about it and I am angry about it. I will not tolerate this kind of behavior in any agency, but particularly…

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April 17, 2013

Corporations’ Excessive Tax Breaks

This is a great report on how corporations avoid paying their fair share of taxes!

If we can also overturn Citizen’s United and gerrymandering, then I believe part of the issues raised here could be dealt with. If corporations are no longer treated as “people,” they would no longer be able outspend real live people in electing and talking to our representatives.  We’ll still have to deal with their paid lobbyists, but at least we can reduce their influence to some extent on who is elected in our own back yards.

Nel's New Day

While you faithfully paid your taxes by yesterday, 26 major American corporations that made $205 billion in pretax profits paid nothing in federal corporate income tax between 2008 and 2011. In 2011 corporations paid a 12.1 percent effective tax rate, the lowest in four decades. Corporations want to have the same rights as “persons,” but real persons can’t have the tax advantages of corporations.

Corporations get tax breaks when they…

Break the law: BP’s toxic mess in the Gulf of Mexico or Wells Fargo’s abusive lending practices that cost tens of thousands American families their homes were fully deductible.

Fall on hard times: When corporations lose money, they can use these losses not only to fully offset taxes for that year but also carry those losses into the future for up to seven years.

Face no income threshold: After Superstorm Sandy devastated millions of American families, they picked up the…

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April 15, 2013

Taxes as a “Blessing of Liberty”

April 15 is Tax Day

April 15 is Tax Day

Today is the day that individual taxes are due in the United States.  Many of us spend hours, if not days, preparing our paperwork to report our income and pay taxes/get a refund from our federal, state, and local governments.  April 15 is the day that all of these payments are due.

Lloyd E. Sheaffer a community columnist for Pennlive/The Patriot-News wrote an op-ed on Sunday, April 14 entitled “Taxes are the price we pay to protect our ‘blessings of liberty’: As I See It.”

Mr. Sheaffer makes an excellent argument as to why we have taxes and even if we don’t like doing the paperwork, we as a society need to pay for our “blessings of liberty” through our taxes.  As he states:

Our tax bill is the tab we pay to live in a democracy that allows all to live as free people, even free to criticize the very system that protects and supports its citizenry.

This support  includes funding for a wide variety of programs and institutions including maintaining our infrastructure (like roads and rail), ensuring our safety (like firefighters and police), improving and maintaining our health (like clean water and air and public health), ensuring justice (like funding courts and civil rights oversight), and creating “a greater chance for material and emotional prosperity if public education is fully funded and appropriately conducted.”

I fully agree with Mr. Schaeffer’s sentiments and suggest that you take a moment and read the full opinion piece.

Here are his closing comments.  I hope you take them to heart:

Nonetheless, if our citizenry can set aside the acrimony felt toward much of our constituted and ordained government and encourage elected officials at all levels to bring genuine reform to our maimed tax system, the day may come when citizens see paying taxes, not as an onerous legal obligation, but as a moral obligation that promotes a “more perfect Union” and truly “secures the Blessings of Liberty to ourselves and our Posterity.”

Until that time comes, sooner rather than later for the sake of us all, I hope you won’t mind paying your duty, even though you don’t like doing so.

“Happy” Tax Day.