Why We Need Tax Reform

You’ve probably heard a lot about tax reform in recent weeks. And for good reason: Taxes are crushing our small businesses.

Two-thirds of small business owners say that high taxes threaten the viability of their business. A new JPMorgan Chase study shows that small business expansion is negligible, as many small businesses—the backbone of the U.S. economy—”operate on a tight budget and essentially live month-to-month.” As JCN President and CEO Alfredo Ortiz recently wrote in The Hill, “Tax reform must be broader than just focusing on the country’s anti-competitive corporate tax rate—it must focus on providing relief for America’s 28 million small businesses and the 85 million Americans who owe their livelihoods to them.

Fortunately, Congress just introduced a solution. It’s called the Bring Small Businesses Back Tax Reform Act, a new bill introduced by Reps. Rand Hultgren (IL) and Jason Smith (MO) and supported by JCN. What does it do? Here are the major provisions:

  • Lower the tax rate for small businesses’ first $150,000 of income to 12 percent and to 25 percent for all income above that threshold.
  • Allow small businesses to immediately expense all investment in equipment.
  • Permit small businesses to defer income declaration until payment is actually received.

These provisions make it easier for small businesses to build additional facilities and hire new employees. How? They reduce the tax burden on small businesses in their earliest days, when they’re trying to get off the ground and expand. The Bring Small Businesses Back Tax Reform Act encourages small business owners to invest in new equipment and grow the business to $150,000 in income and beyond.

Tax reform promotes job creation and helps the 85 million Americans who depend on small business.

Source: https://informationstation.org/kitchen_tab...

Job Creators Network Urges Action on Overtime Pay

Right now, business owners have a chance to delay the new regulation that more than doubles the salary threshold for employees to be exempt from overtime pay.

The House of Representatives has already passed legislation to delay the December 1 deadline. The Senate's Overtime Reform and Review Act (S. 3464), sponsored by Health, Education, Labor and Pensions Committee Chairman Lamar Alexander will:

  • Reduce the increase to only $35,984 on Dec 1 and delays future increases until Dec 1, 2018
  • Require a General Accounting Office study on the effects of increases to the salary threshold for exempt employees
  • Raise the threshold roughly 10% each year over the next three years to finally reach $47,476 in 2020 (Instead of raising it to $47,476 next month!)
  • Stop the automatic 3-year escalators required by the original rule

While this bill doesn't fix this regulation entirely, it helps businesses large and small deal with this regulation a lot easier than the current rule. Due to the current make up of the Senate, this bill is the best shot we've got. Please take a few minutes to write your Senator and explain how important it would be for you and other job creators to have a gradual phase in of the new threshold.

Please click the link below to take action on this important legislation.


Alfredo Ortiz
President & CEO
Job Creators Network


Federal Interest Rates: What’s Next?

By Todd Hauer

During its September meeting, the Federal Reserve decided against raising interest rates – as many had expected. The Fed cited that, while the case for an increase had strengthened, it would like to see further evidence of progress before they decide to raise rates. Though there are two more meetings left this year, economists believe that all eyes will be on December as November will be too close to the election for a major increase decision.

While some are predicting a rate hike will occur in December, we disagree that the case for the next rate hike has strengthened. Morgan Stanley’s Chief US Economist Ellen Zentner believes justifying a hike this year will not be easy and the Fed will take no action this year or next. Given more accommodative monetary policy, Zentner maintains her forecast for 1.7% annual growth this year, but believes the economy will slow to a 1.5% annual growth rate in 2017.

The forecast is a result of mixed performance in recent economic indicators over the past few months. Job and wage growth slowed in August while the US Consumer Sentiment Index dipped slightly from August. Additionally, a report from the Institute for Supply Management showed that U.S. services sector activity dropped to a 6 ½ year low in August amid declines in production and orders, further pointing toward slowed economic growth. The drop from July was the largest monthly decrease since November 2008.

The Fed will need to be more patient in determining whether or not the U.S. economy is able to handle a rate hike in the near future given the current economic climate. Some key Fed officials believe that core inflation will need to move closer to the 2% target before any action can be taken. If Morgan Stanley’s predictions are correct and economic growth continues to slow, it's unlikely we're going to see the targeted 2% inflation rate, thus signaling no rate increases in the near future.

Investors with a close eye to the markets may become skittish when they can’t see down the road and may sell or allocate their assets and securities into safer areas. However, it’s important to note that a quarter of a point interest rate hike would still leave rates low, compared to historical norms. Generally, the average consumer will not see much of an impact until rates are raised more substantially.

One of the best ways to counter volatility and market swings is to invest for “decades, not days.” In general, the market tends to reward consistency over time.

U.S. Ranks 5th Worst on International Tax Competitiveness Among OECD Nations

From the Tax Foundation

On October 5, 2016, we released the 2016 International Tax Competitiveness Index (ITCI), and this year the United States ranks 31st out of the 35 countries in the Organisation for Economic Co-operation and Development (OECD). With the fifth least competitive tax code in the developed world, only Greece, Portugal, Italy, and France rank worse than the U.S. The report finds that Estonia (#1), New Zealand (#2), and Latvia (#3) have the most competitive codes among the OECD nations. 

The ITCI attempts to determine which countries provide the best tax environment for investment and business growth and development. It does this by measuring the competitiveness of tax systems in the OECD’s 35 countries based on more than 40 tax policy variables in five categories: corporate income taxes, individual taxes, consumption taxes, property taxes, and the treatment of foreign earnings.

The United States ranks poorly largely due to five factors. The U.S. maintains the highest corporate tax rate among OECD nations at 39.1%, it levies relatively high property taxes on real property, has high progressive income taxes that apply to capital gains and dividends, has estate taxes, and ranks at the bottom with its treatment of foreign earnings. 

The least competitive tax code among OECD nations belongs to France. In addition to having the highest property and individual tax rates, France has the third highest corporate income tax rate at 34.4%, a financial transaction tax, and an annual net wealth tax. 

At the other end of the spectrum, Estonia for the third year in a row ranks as having the most competitive tax code among OECD nations. This is largely due to its 20% tax rate on corporate income that is only applied to distributed profits. It has a flat 20% tax on individual income that doesn't apply to personal dividend income. Its property tax applies only to the value of land rather than taxing the value of real property or capital. It also has a territorial tax system that exempts 100% of the foreign profits earned by domestic corporations from domestic taxation. 

“No longer can a country levy high taxes on business investment and activity without adversely affecting its economic performance,” said Tax Foundation Director of Federal Projects Kyle Pomerleau. “In recent years, many countries have recognized this fact and have moved to reform their tax codes to be more competitive. However, others have failed to do so and are falling behind the global movement.”

The U.S. is a great example of this. The last major change to the U.S. tax code occurred 30 years ago, when Congress reduced the marginal corporate income tax rate from 46 percent to 34 percent in an attempt to make U.S. corporations more competitive overseas. Since 1986, other OECD countries have followed suit, reforming their tax codes -- and leaving the United States with one of the least competitive tax codes in the world.

Full Report: 2016 International Tax Competitiveness Index

Vote Yes on 4B for Continued Culture, Science and Art

An op-ed by COBRT President Jeff Wasden

Voters in November have an opportunity to continue one of metro Denver’s economic and cultural success stories with a Yes on 4B, a vote for the Scientific and Cultural Facilities District reauthorization. Voters in 1988 approved the Scientific and Cultural Facilities District (SCFD) that provides funding for 300 cultural facilities across seven metro counties. For one penny on every $10 purchase, residents are supporting arts, culture, and even scientific organizations regionally and locally. Twice before, voters have overwhelmingly substantiated the SCFD’s mission to enlighten and entertain the public through the production, presentation, exhibition, advancement and preservation of art, music, theatre, dance, zoology, botany, natural history, and cultural history.

Business owners are constantly evaluating initiatives, capital expenditures, and the return on investment (ROI). As President of the Colorado Business Roundtable, I feel that same benchmark is just as important to this reauthorization vote as it is to any new technology, capital purchase, potential new employee, or acquisition. We should look at what SCFD has contributed to the Denver metro area and local communities. What value-added investments has SCFD made that warrant our strong support and endorsement urging reauthorization? Last year alone, nearly 15 million visitors attended the 300 organizations and facilities supported by SCFD funding, often at a free or reduced rate (an increase of 95% since the district’s inception in 1988). More than 4.25 million students are able to experience both the educational and cultural programming for free throughout the year. The economic benefits alone pump nearly 1.85 billion dollars per year in the metro Denver economy through job creation, tourism, and audience spending, while employing over 10,000 Coloradans each year.

This year, positive changes to the funding formula are proposed that increase funding to small and mid-sized organizations, driving significant benefits to local economies through educational and cultural experiences right at home. SCFD has maintained accountability and transparency to the public, supporting this investment with no increase to the existing tax rate.

In their study, “The Metropolitan Revolution,” authors Bruce Katz and Jennifer Bradley look at how cities and metropolitan areas have found success in fixing broken policies and fragile economies. The creation and passage of the Scientific and Cultural Facilities District is cited as one of four major initiatives that gave rebirth to the metro Denver economy following the early 1980’s energy bust.

Another study, “How the Arts Impact Communities: An introduction to the literature on arts impact studies,” was conducted by Joshua Guetzkow. In his study, Guetzkow dives into not only the types of impact (whether economic, cultural, or social), but also the impact to the community and individuals. Guetzkow found that the arts industry is an ‘export’ industry that attracts visitors, and visitors’ direct and indirect spending creates a multiplier effect on the local economy. An indirect multiplier is based on the idea that a portion of each dollar spent on some good or service is then used by the recipient to pay for more goods and services. To the extent that the money circulates within a community (e.g., a city), it ‘multiplies’ within that community.

The study also found that the arts industry builds interpersonal ties and promotes volunteering, which improves health while increasing opportunities for self-expression and enjoyment. Guetzkow also found that when youth are exposed to the arts, it can reduce delinquency in high-risk youth while providing an increased sense of individual efficacy and self-esteem. Guetzkow maintains the arts industry improves individuals’ sense of belonging or attachment to a community while improving human capital: skills and creative abilities. Wages to paid employees increase spending in local restaurants, bars, and nightclubs. Residents spend money on attending the arts and in local businesses.

The very presence of artists and arts and science increases attractiveness of area to tourists, businesses, and investors. Guetzkow found in his study that art fosters a ‘creative milieu’ that spurs economic growth in creative industries, and there is a greater likelihood of revitalization and investment. The arts attract residents and businesses. Businesses, especially those that employ highly trained mobile personnel, may consider the presence of art venues when making (re)location decisions (Cwi 1980b: 18-19). High concentrations of artists and/or high-skilled workers may produce agglomeration effects, where businesses, especially those in the fast-growing ‘creative industries’ (Walesh 2001), are drawn to an area because of the availability of creative talent and/or high-skilled workers, and vice versa.

These studies and our research certainly give powerful, empirical data on why we strongly urge a Yes on 4B vote. SCFD has had a positive impact upon our communities, with our students, and on local economies. Please join us in making a strong statement on the type of community you want for your kids, neighborhoods, schools, businesses, and the thriving arts scene. A Yes vote on 4B is a vote for continuing the strong economic and cultural prosperity metro Denver is enjoying and moving that forward for decades to come.

CEO Economic Outlook Suggests Continued Concerns Over Flat Economy

This original post is found on Business Roundtable: http://businessroundtable.org/resources/ceo-survey/2016-Q3.

Washington — CEOs report lower expectations for sales, roughly unchanged plans for hiring and nearly flat plans for capital spending in the third quarter of 2016. Overall, the results suggest that the American economy is likely to continue to experience lackluster growth.

The Business Roundtable CEO Economic Outlook Index — a composite of CEO projections for sales and plans for capital spending and hiring over the next six months — declined by 3.9 points, from 73.5 in the second quarter to 69.6 in the third quarter. The Index remains below its historical average of 79.6. It remains well above 50, indicating continued economic expansion — although well below the full potential of U.S. economic growth. 

According to the Business Roundtable third quarter 2016 CEO Economic Outlook Survey, CEO expectations for sales over the next six months declined by 9.3 points, while expectations for hiring declined by 3.4 points from last quarter. CEO plans for capital expenditures ticked up slightly by 0.8 point relative to last quarter.

In their fourth estimate of real GDP growth for 2016, CEOs expect 2.2 percent growth, a slight tick upward from their 2.1 percent estimate in the second quarter of 2016 and roughly in line with other well-regarded estimates.

“To increase investment and opportunity, Roundtable members continue to think Washington can better support our economy through measures that create growth,” said Doug Oberhelman, Chairman & CEO of Caterpillar Inc. and Chairman of Business Roundtable. “For the past year, the Business Roundtable CEO Economic Outlook has consistently remained below its long-term average. This reflects the unfortunate new normal — where the U.S. economy is pretty much stuck in neutral rather than moving forward. The continued lack of action on an aggressive pro-growth policy agenda that includes tax reform, trade expansion and a smarter approach to federal regulation contributes to an economy that continues to perform below its potential.”

See more of this report at Business Roundtable: http://businessroundtable.org/resources/ceo-survey/2016-Q3.

Statement by Maya MacGuineas: CBO Paints a Dismal Picture of Unsustainable Long-Term Debt Growth

The July 12, 2016 report from the Congressional Budget Office confirms what we’ve known for some time – that last year’s fiscally irresponsible legislation has worsened an already dismal long-term fiscal outlook.
Last year, CBO warned debt would rise from a post-war record of 75 percent of GDP today to 107 percent of GDP by 2040; this year they project it will rise to 122 percent of GDP by 2040, and keep growing after that to 141 percent three decades from now.
This trajectory cannot continue. It is a virtual roadmap to financial peril. CBO warns that high and rising levels of debt will slow income growth, increase interest costs, crowd out important budget priorities, limit the ability of lawmakers to respond to a crisis, and increase the likelihood of a fiscal crisis. 
The largest driver of the growth in long-term debt is the one area neither presidential candidate has a plan to address: entitlement spending. Policymakers should act quickly to reform these programs in order to slow the growth of health care and make Social Security solvent.
The presidential candidates should step up and address our dangerous long-term debt trajectory with constructive solutions and real leadership, not continuing to duck these challenges as they have so far. 
The longer we wait to act, the more painful the adjustments will be. So let’s start the discussion today.

For more information, contact Patrick Newton at media@fixthedebt.org.
For more information about the Fix the Debt Campaign, please visit www.fixthedebt.org.

Campaign to Fix the Debt
1900 M Street NW
Suite 850
Washington DC 20036 United States

Denver Real Estate Market Out of Step with Views of Local High Net Worth Investors

The results of a recent Investor Pulse Poll conducted by Morgan Stanley Wealth Management show that Denver-area high net worth (HNW) investors resoundingly declare the region’s housing market both overpriced and unaffordable to first-time home buyers. However, they are torn on whether Millennials should prioritize investing in a home above other financial goals.* 

Morgan Stanley Wealth Management’s Investor Pulse Poll is a survey of more than 1,000 national and local HNW investors designed to measure the investment pulse nationally and in selected markets across the country. 

Investors Critical of Rising College Costs
In Denver, college was another point of contention: 
•    93% agree, and 55% strongly agree, that the sharp rises in cost are not justified
•    70% believe a college degree to be a “must” for students today
•    64% believe anyone who applies himself or herself can find the financial aid and scholarships needed to afford college 

However, there is far less consensus on whether children should bear the responsibility of paying for their college tuition (51% agree) or whether a four-year college degree is worth paying for regardless of the price tag (47% agree).

Investing in the Future: Interest in Sustainable and Socially Responsible Investing
Six in 10 Denver-area HNW investors are at least somewhat familiar with socially responsible investing, with slightly less – 48% - considering themselves well-versed in sustainable investing. 

Moreover, respondents overall are open to both concepts after being provided with brief descriptions.  In particular, 68% are somewhat or very interested in sustainable investing, with 51% rating it as a “good” investment this year.  Socially responsible investing is not far behind, with 62% expressing interest and 46% seeing promise this year.

Enthusiasm for Fossil Fuels Wanes as Expectations for Renewables Far Exceed Those of Traditional Energy Sources in 2016
Aligning with their interest in sustainable investing, Denver-area HNW investors rank renewable energy sources highest when focusing on specific types of energy investments in 2016 –  with solar (64% rate as “good”) and wind (56% rate as “good”) taking the top spots.  Natural gas (49%), the only traditional source to crack the top-five, and battery-powered electric vehicles (41%) follow not far behind. 

When asked about a series of energy-related issues or initiatives, renewables garner the most support. In particular, expanding wind (88%) and solar (87%) farms topped the list of priorities for respondents.

Investment Considerations and Portfolios
Concerns about terrorism (85%), the prospect of affording quality healthcare (83%) and the government budget deficit (81%) weigh heavily on Denver-area HNW investors’ minds.  Over half (55%) feel there will be another recession in the next five years.

Denver-area HNW investors also overwhelmingly feel it is important for the Federal government to address healthcare costs (90%), the economy (86%) and our nation’s infrastructure (80%). 

When considering investments for this year, Denver-area HNW investors:  
•    Favor: dividend-bearing stocks (51% say “good”), actively managed mutual funds (42%), mutual or exchange-traded funds (42%), broad stock market and exchange-traded funds (38%), and a cash position (36%)
•    Disfavor: hedge funds (7% say “good”), insurance (13%), private equity funds (16%), international stocks or mutual funds (20%) and bond funds (20%).

When considering various investment sectors, Denver-area HNW investors:
•    Favor: technology (68% say “good”), pharmaceuticals (51%), renewable energy (51%), bio-tech (50%) and healthcare (48%)
•    Disfavor: consumer discretionary (16% say “good”), insurance (22%), entertainment (24%), tourism (26%), financial services (28%) and industrials (also 28%). 

Todd Hauer is a Financial Advisor with the Global Wealth Management Division of Morgan Stanley in Denver. The information contained in this interview is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives.  Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Wealth Management, or its affiliates. Morgan Stanley Smith Barney, LLC, member SIPC. 

*The Investor Pulse Poll was conducted by GfK Public Affairs & Corporate Communications using the GfK KnowledgePanel from December 3 to December 28, 2015. In order to qualify for this study, respondents were required to have $100,000 or more in household liquid investable assets, be between the ages of 25 and 75 years old. The Investor Pulse Poll surveyed 1,003 high net worth investors from December 3 to December 28, 2015. High net worth investors account for 95% of total U.S. household investable assets by value, according to Federal Reserve data. Oversamples were obtained in the Denver metropolitan area.


Sustainable Investing and Socially Responsible Investing - Fad or Future

By Shelley Ford

In the last few years, many have expressed increased interest in sustainable investing and/or socially responsible investing as a new way to protect our planet, both environmentally and socially. In fact, interest in the topic has grown by 76% over the past two years. So what exactly is sustainable investing and socially responsible investing? And is it just a passing trend or the status quo of the future? 

Sustainable investing and socially responsible investing refers to the practice of developing portfolios that are personalized to specific environmental or social causes. For example, those interested in improving access to clean drinking water may feel empowered to invest in companies that act in accordance with those values.

A recent poll of Denver high net worth investors showed that half or more are familiar with socially responsible and sustainable investing on an unaided basis. After being provided brief descriptions of each term, they were most receptive to sustainable investing (68%), and 51% believed that it was a “good” investment in 2016. Socially responsible investing was not far behind, with 62% expressing interest and 46% viewing it as a “good” investment. Additionally, half have taken some type of action in this area such as investing in clean energy funds.

These results are further bolstered by the current investment climate where $1 out of every $6 of professionally managed assets in the U.S. is invested in some form of sustainable investment, to a total of $6.57 trillion.

I believe that sustainable investing and socially responsible investing is here to stay.

There are some that believe there is a trade off in activating portfolios toward positive impact. However, research shows that investing in sustainability has usually met — and often exceeded — the performance of comparable traditional investments. This is on both an absolute and a risk-adjusted basis, across asset classes and over time.

Investors are becoming increasingly attracted to using their portfolios as a vehicle to create positive change. Sustainable and socially responsible investing offers these investors the opportunity to personalize their strategies, themes and goals while supporting positive local or global causes. If you are considering these types of investment for your portfolio, it’s important to have a complete understanding of your options and the implications of each before making a decision.

Investors should not adopt a one-size-fits-all approach to evaluating impact investment opportunities. Just as investors have unique financial objectives, they tend to have very different impact goals as well. An awareness of these general considerations can help investors navigate their search for investments that provide financial returns with measurable impact.

Shelley Ford is a Financial Advisor with the Pelican Bay Group of the Global Wealth Management Division of Morgan Stanley in Denver. The information contained in this interview is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives.  Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Wealth Management, or its affiliates. Morgan Stanley Smith Barney, LLC, member SIPC. 

IRS Products Assist Small Biz and Self-Employed

The Internal Revenue Service (IRS) is marking National Small Business Week, May 1 to 7, by encouraging small-business owners and self-employed individuals to check out several products to help them understand and meet their tax obligations.

The products include a series of educational webinars to help you not only be tax compliant, but also to help your businesses thrive. The webinars start at 2 p.m. Eastern (11 a.m., Pacific; noon, Mountain; 1 p.m., Central). If you missed it, each webinar topic has a tax tip or fact sheet with more information:

Tax Tips for your New Business, May 2
Register at https://www.webcaster4.com/Webcast/Page/445/14468
IRS Tax Tips for Starting a Business

Staying Afloat: Planning for Emergencies Before they Happen, May 3
Register at https://www.webcaster4.com/Webcast/Page/445/14492
Look to the IRS for Tax Help in the Event of a Disaster

Worker Classification: Employee or Independent Contractor? (in Spanish), May 4
Register at https://www.webcaster4.com/Webcast/Page/445/14546
Payments to Independent Contractors

Tip Reporting and Tips vs. Service Charges, May 5
Register at https://www.webcaster4.com/Webcast/Page/445/14436
Tips Versus Services Charges: How to Report

Other Small Business Products
The IRS video portal contains video and audio presentations on a variety of topics of interest to small businesses.

The IRS YouTube video channel also offers videos for small businesses including:
·       IRS Tax Calendar
·     Audits by Mail – What to Do?
·     Simplified Home Office Deduction

The Small Business and Self-Employed Tax Center  is a complete online resource featuring links to a variety of useful tools, including Small Business Taxes: The Virtual Workshop, a downloadable tax calendar and common forms and their instructions. The Center provides help on everything from how to get an Employer Identification Number online to how to engage with the IRS during an audit.

The Self-Employed Individuals Tax Center is for sole proprietors and others who are in business for themselves. This site has many useful tips and references to the tax rules that a self-employed person may need to know.

The Online Learning and Educational Products page has tools to help taxpayers learn about taxes on their own time, and at their own pace. For example, the IRS Tax Calendar for Businesses and Self-Employed has important tax dates for businesses. Download the Calendar Connector tool to get the dates even when offline.

e-News for Small Businesses is a free electronic mail service providing tax information for small business owners and self-employed individuals. 

SSA/IRS Reporter is a quarterly, online-only publication for businesses, payroll professionals and others who deal with payroll taxes and employee issues.

Do some or all of your employees lack access to a retirement savings plan? You can help them get started saving for retirement with myRA, a simple, safe and affordable retirement savings option from the U.S. Treasury. Learn more here.

Federal Balancing Act: An Interactive Budget Simulation To Spur National Dialogue On Rising Deficits and Political Priorities

What if federal budget decisions were in your hands? New online tool lets each American see impact of changing priorities in health care, Social Security and income tax rates

The Bipartisan Policy Center in partnership with Engaged Public’s Balancing Act launched on March 17, 2016 the Federal Balancing Act: An Interactive Budget Simulation to promote a deeper dialogue and citizen engagement on the federal budget. The user-friendly interactive tool was created by Denver public policy firm Engaged Public, with the budget narrative and analysis provided by BPC, a Washington think tank.

“With the federal budget deficit increasing once again and a presidential election underway, now is the perfect time for citizens to engage on the issue with the Federal Balancing Act budget simulation,” Bill Hoagland, senior vice president at BPC, said. “This tool gives individual citizens the opportunity to easily craft a budget that reflects their priorities.”

The Federal Balancing Act simulation begins with a breakdown of the budget for Fiscal Year 2016, which is projected to run a $544 billion deficit, and includes information about how the government collects taxes and what programs the money is spent on. Users are then able to make changes to tax and spending categories based on their policy priorities. The simulator also projects the impact of those decisions 25 years out.

“Citizens pay trillions of dollars a year in taxes, but few understand the process for collecting and spending that money,” said Chris Adams, president of Engaged Public. “We are changing that with a convenient simulation-based tool that not only shows the public how their federal tax dollars are currently raised and spent, but also asks them to constructively join the decision-making process.”

Users have the opportunity to adjust a wide variety of federal programs, including health care, Social Security, defense, anti-poverty safety nets, veterans’ benefits and services, infrastructure, education, scientific research, and many others. Changes to revenue sources -- such as individual income taxes, corporate income taxes, the federal gas tax and more -- can pay for these programs.

“As consumers, Americans have come to expect information about what they buy,” Adams said. “As citizens, they should expect the same. Our goal is to connect people to government at all levels through transparency and genuine opportunities for participation.”

Federal Balancing Act also allows users to see the potential impact of changes to politically sensitive policies including: 

  • Addressing the costs of entitlement programs like Medicare
  • Raising Social Security’s retirement age
  • Changing average income tax rates
  • Adjusting spending levels on domestic investments such as infrastructure, education and scientific research

“With each adjustment to tax and spending categories, users instantly see the near-term and long-term impact on balancing – or not balancing -- the nation’s budget,” Hoagland said.

BPC and Engaged Public will report regularly on what is learned about public preferences from the simulator.

For more information, visit the Federal Balancing Act.

Bipartisan Policy Center
The Bipartisan Policy Center (BPC) is a non-profit organization that drives principled solutions through rigorous analysis, reasoned negotiation and respectful dialogue. With projects in multiple issue areas, BPC combines politically balanced policymaking with strong, proactive advocacy and outreach. As the only Washington, DC-based think tank that actively promotes bipartisanship, BPC works to address the key challenges facing the nation. Visit us at www.bipartisanpolicy.org

About Engaged Public
Engaged Public is a Denver-based, boutique public engagement firm that develops strategies for solving problems, working with civic leaders, stakeholders, and the public. Engaged Public is also the creator of civic engagement apps Balancing Act, an interactive budget simulation tool for learning about public budgets, and the Taxpayer Receipt, a breakdown of taxes paid. To learn more visit us at www.EngagedPublic.com.

Funding Bill Moves Forward

On Sept. 22, after Senate Democrats blocked consideration of a 20-week abortion ban and the fiscal 2016 Defense spending bill, Majority Leader Mitch McConnell (R-Ky.) moved forward on lining up procedural votes for Sept. 24 on a short-term continuing resolution (CR). The vote will occur the same day Pope Francis will speak to a joint session of Congress.

The Senate is expected to hold a cloture vote on an amendment that contains the text of the 10-week CR, which includes language defunding Planned Parenthood unless the group certifies it will not perform or fund abortions, redirecting the approximately $235 million in mandatory funding to community health centers.

Leader McConnell began the procedural maneuvering to use the shell of the Iran disapproval bill (H.J.Res. 61) as a vehicle for the must-pass CR, this technique allows the Senate to consider the spending measure before the House.

The Senate Appropriations Committee released the text of the CR on Sept. 22 which will provide funding at an annual rate of $1.017 trillion, mirroring the topline discretionary spending limit established by the Budget Control Act for fiscal year 2016. The resolution, introduced by Senate Appropriations Committee Chairman Thad Cochran (R-Miss.), would fund the government until Dec. 11, 2015 giving congressional leaders time to negotiate a year-end budget deal with President Barack Obama.

Specifically, the CR keeps most federal programs operating at their current levels but includes $700 million in additional emergency funding to fight Western wildfires. The CR would also fund war operations at a rate of $74.76 billion, roughly equal to fiscal 2015 levels. The spending bill would also extend expiring authorizations for the Federal Aviation Administration, the E-Verify program and the Internet Tax Freedom Act.

It is expected that Senate Democrats will filibuster the CR funding measure because of the Planned Parenthood rider, setting up votes on a so-called “clean” continuing resolution next week, and sending it to the House ahead of the Sept. 30 funding expiration date.

Meanwhile, House Republican leaders are expected to meet Thursday after Pope Francis’s address to Congress, to discuss the next steps on government funding. Speaker John Boehner (R-Ohio) and his colleagues will have to determine whether to wait for the Senate to pass its government funding bill—which is almost certain to be free of riders to defund Planned Parenthood. Or alternatively, the House can pass its own CR to keep the government open and strip the women's health group of its federal funding, although the Senate cannot clear a funding measure that strips out money for Planned Parenthood.

House Republican leaders have shifted their focus to budget reconciliation, which only requires a simple majority for passage in the Senate. They believe that measure would make it to President Barack Obama's desk.

For more information, you can view the press release here, section-by-section analysis here, a one-pager here and bill text here.

Source: http://us1.campaign-archive2.com/?u=7b612f...

Coca-Cola Says IRS Wants $3.3 Billion After Tax Audit

The Coca-Cola Company has received notice from the Internal Revenue Service that it owes roughly $3.3 billion in additional taxes - plus interest.  Coca-Cola is the latest corporation clashing with the agency over its methods of booking profits in foreign countries.

The IRS’s move follows an audit of the tax years 2007 through 2009, Coca-Cola said in a regulatory filing posted Friday. The statement also says the IRS hasn’t demanded any extra penalties.  The agency told Coca-Cola that the matter has been brought to the IRS’s top lawyer with the recommendation that it be litigated, according to the filing. Coca-Cola believes the assessment is without merit.

Coca-Cola is only one of several large American corporations to recently have IRS trouble over profits recorded in foreign countries. Critics say multi-national corporations are abusing tax loopholes and are unfairly shielding money from the U.S. government. The IRS also is fighting with Amazon.com Inc. and Microsoft Corp. on their intra-company transactions. Coca-Cola’s dispute centers on licensing of properties to foreign-based businesses, which manufacture, distribute and sell products.

“We plan to pursue all administrative and judicial remedies necessary to resolve this matter,” Coca-Cola said in a separate statement on Friday. “The company has followed the same methodology for determining our U.S. taxable income from certain foreign company operations for nearly 30 years.”

“The IRS now seeks to depart from this longstanding practice in order to increase substantially the amount of tax,” Coca-Cola said. “We are among hundreds of other companies currently facing these types of adjustments involving payments between related companies, and we will vigorously defend our position. We are confident we will prevail on the merits of this case.”

Source: http://www.sec.gov/Archives/edgar/data/213...

Colorado February Jobs Report Analysis and Other Economic Indicators

By Brian Lewandowski, Associate Director, Business Research Division, Leeds School of Business 

The April jobs report was released for Colorado today, with the preliminary numbers showing a month-over-month increase in employment (4,200 jobs, 0.2%) and an upward revision to the March estimates. According to data from the Colorado Department of Labor and Employment (CDLE) and the Bureau of Labor Statistics (BLS), April recorded 63,200 more jobs than the same month in 2014, increasing 2.6% year-over-year. The pace of growth is slowing in Colorado according to the preliminary April numbers—after growing in excess of 3% for 16 consecutive months, March and April slowed to 2.8% and 2.6% year-over-year growth, respectively. Year-over-year growth in April ranked Colorado 11th nationally, and monthly growth ranked the state 27th. Average weekly wages increased year-over-year for each quarter in 2014 (4.2%, 3.2%, 3.1%, and 2.9%, respectively) based on data from the CDLE. State per capita personal income increased 3.9% in 2014 to rank 14th nationally, and quarterly personal income rose 5.9% year-over-year in Q4 2014. 

Colorado employment grew year-over-year in all of Colorado’s metropolitan statistical areas (MSAs), while monthly growth decreased in four MSAs. Industry growth was recorded in 10 of the 11 industries in the state year-over-year, but growth was only recorded in six industries month-over-month. The velocity of growth slowed in eight industries. 

The greatest year-over-year percentage gains were in Construction (9.8%), Mining and Logging (5.5%), and Education and Health Services (4.9%). The weakest sectors for growth included Information (-3.9%); Professional and Business Services (0.8%); and Trade, Transportation, and Utilities (1.3%). Compared to March, the strongest month-over-month growth came from Other Services, Leisure and Hospitality, and Construction; the weakest was in Mining and Logging, Information, and Financial Activities. However, the Colorado Department of Labor and Employment expressed anticipated revisions based on newly released Q4 QCEW data:

Industry sectors expected to undergo the greatest upward revisions to payroll jobs estimates in the 4th quarter include government, trade, transportation and utilities, professional and business services and other services. Jobs in mining and logging, information, financial activities and education and health services may also be revised up.
— -State Labor Department Releases Analysis of Q4 2014 Economic Data, May 27, 2015

According to the release of the Q4 2014 Quarterly Census of Employment and Wages data, the state of Colorado added 81,983 jobs from 2013 to 2014, representing a 4% increase in total employment. The industry with the biggest percent increase was Mining Support Activities, which recorded 21% growth over the period (3,225 jobs). Construction and its related industries also showed marked growth year-over-year: Construction grew 11% and added 14,543 jobs, Specialty Trade Contractors grew 11% with 9,207 added jobs, and Heavy and Civil Engineering also grew by 11% with 2,225 jobs added. While the Mining industry overall gained 3,414 jobs (11%), the Mining, Except Oil and Gas industry lost 415 (8%) jobs, indicating that growth in the 

industry comes exclusively from oil and gas. Total statewide wages also posted an increase in 2014; they grew by 7% over the period. Growth in wages corresponds greatly with employment growth; Mining Support Activities saw 29% growth, Construction saw 17% growth, Construction of Buildings saw 19% growth, and Specialty Trade Contractors saw 17% growth. 

Growth in Colorado’s Manufacturing Sector ranked 5th nationally, with 3.2% year-over-year growth, and gained 0.3% from March to April. The Construction industry showed the greatest pace of job growth year-over-year in Colorado. The industry grew 9.8%, which leaves Colorado 15,700 construction jobs (9.7%) below the previous industry peak in 2007. Home prices increased 9.4% year-over-year in Q1 2015 according to the FHFA home price index (10.2% in the Denver-Aurora-Lakewood MSA). 

While WTI oil spot prices began to fall in June 2014, the economic indicators remained fairly strong until early 2015. As of late-May, the WTI spot price had increased 37% from March 17, 2015, but was still down 44.9% from June 20, 2014. Average natural gas (Henry Hub) prices were down 38.5% year-over-year in May, and gasoline prices down 24.2%. The falling oil and gas prices have placed a drag on the oil and gas industry nationally and in Colorado. The Baker-Hughes rig count in Colorado was down 40.8% in May compared to the same period in 2014. Evidence of the slowing industry also shows in the employment numbers—while employment in the Mining and Logging Sector, which is dominated by oil and gas activity, was up 5.5% year-over-year in April, the sector recorded a third-consecutive month-over-month decline—the worst since November 2012. Likewise, the Greeley MSA declined for three consecutive months. Monthly drilling permits—a metric that tends to be volatile—were half what they were in April 2014. Of the 42 states with published Mining and Logging employment, only 6 states marked monthly employment growth in April, and 9 recorded year-over-year growth. 

The April unemployment rate stood at 4.2% for the 5th consecutive month, ranking Colorado 14th nationally. At the low end, Nebraska and North Dakota ranked 1st and 2nd, at 2.5% and 3.1%, respectively. At the high end, Nevada and West Virginia ranked 50th and 49th, with 7.1% and 7% unemployment, respectively. Year-over-year growth (0.7%) in the Colorado labor force ranked 33rd in percentage terms in absolute growth. 

When compared to other states Colorado still remains one of the best recovery states in the nation in terms of employment, ranking 4th nationally for growth above the previous peak, behind only North Dakota, Texas, and Utah. Colorado now measures 6.2% above 2008 peak employment compared to 2.2% for the nation. National job growth accelerated in April, with the United States adding 223,000 jobs compared to 85,000 in March. The three-month moving average ending in April was 191,000 compared to 248,000 a year ago. 

The variation in growth around the state is beginning to moderate as growth rates in Southern and Western Colorado increase and the northern energy corridor slow. Year-over-year growth was recorded in all of Colorado’s MSAs: Greeley (5.6%), Denver-Aurora-Broomfield (3.2%), Grand Junction (2.5%), Fort Collins-Loveland (2.2%), Colorado Springs (2.1%), Pueblo (2%), and Boulder (1.6%). 

The May national jobs report will be released June 5, 2015. The May state jobs report will be released June 19, 2015.