2024 Taxpayer Tricks and Treats

Taxpayers Protection Alliance

October 24, 2024

From Nosferatu to Norman Bates, plenty of things go bump in the night. However, some of the scariest stuff happens in broad daylight. Congress has been spending money like a drunken Flying Dutchman, resulting in a national debt of more than $35 trillion. The horrifying truth is that every single person living in the U.S. owes more than $100,000 in present and future taxes. Meanwhile, endless regulations have cast a dreadful spell over the American economy, with bureaucrats conjuring up about 3,000 newly finalized rules each year. But fear not. The Taxpayers Protection Alliance (TPA) has offered some Tricks and Treats to keep taxpayers and consumers from falling into the hands of ghouls and gremlins:

Direct File, or the IRS Reaching into Your Candy Bowl

Consumers may think that they bought enough candy to handle the hordes of trick-or-treaters coming to their doors, but they’re in for a nasty surprise. The Internal Revenue Service (IRS) is hellbent on taking ever-more of their well-earned treats. Now, bureaucrats have become even more creative in that quest. Even if tax rates don’t creep higher, the agency could grab more money by doing Americans’ taxes “for free,” with an eye toward minimizing deductions.

Under the “Direct File” program, the agency wants to file citizens’ taxes, collect that money, and double back to conduct audits — without any mediating institution to ferret out potential (nay, likely) abuse. Low-income and minority taxpayers — whom IRS auditors target disproportionately and to whom the IRS would likely market Direct File most energetically — have perhaps the most significant interest in retaining private intermediaries such as TurboTax or TaxSlayer.

Like most candy grabs, the Direct File program is anything but free. The IRS estimates Direct File to cost $64 million to $249 million annually, which is very likely an underestimate. In 2021, researchers at Govini analyzed Direct File’s likely price tag against the experience of Healthcare.gov, concluding that the former’s costs would dwarf the latter’s. Govini reported the Obamacare website cost taxpayers $20.2 billion through October 2021.

The IRS should stop reaching into taxpayers’ candy bowls and end the not-so-sweet Direct File program.

Tariffs are a Hellraiser for Consumers

Early American settlers used to keep demons away by hiding their personal items, hoping that evil spirits would become confused and ultimately trapped by this ruse. Unfortunately, there’s no similar way to escape the monstrosity of U.S. import taxes (aka: tariffs). Virtually everything that crosses the border into the U.S., from steel and aluminum products to medical goods to semiconductors, has been taxed to no end by both the Trump and Biden administrations alike. As noted by the Tax Foundation in a June 2024 report:

The Trump administration imposed nearly $80 billion worth of new taxes on Americans by levying tariffs on thousands of products valued at approximately $380 billion in 2018 and 2019, amounting to one of the largest tax increases in decades. The Biden administration has kept most of the Trump administration tariffs in place, and in May 2024, announced tariff hikes on an additional $18 billion of Chinese goods, including semiconductors and electric vehicles, for an additional tax increase of $3.6 billion.

Just like some of the worst demons out there, the tariff system refuses to die. Both former President Trump and Vice President Harris have called for continued (and even higher) tariffs. Unfortunately, it is consumers who will be sure to pay the price. Hopefully, politicians can conjure up lower tariffs and save families $1,000 per year.

The Headless Horseman, or Broadband Consultants Gone Awry

Villagers hearing the haunting sound of horse hooves tremble knowing that the headless horseman is near. Similarly, taxpayers and consumers in cities besieged by broadband consultants should fear the very worst.

As TPA has pointed out in its recent reports “GON with the Wind: The Failed Promise of Government Owned Networks Across the Country” and “GON With the Wind II: Frankly, Taxpayers Do Care,” consultants on municipal broadband projects often have the answer before local governments even ask the question of whether to build a government-owned network (GON). GONs often fail and leave taxpayers and electric ratepayers with the debt. Consultants rarely advocate anything other than building a GON because they have something to sell municipalities on the back end – from software to construction to overall management of the GON.

In July, TPA released its “Government Broadband Consultants – The Big Grift” report, detailing how consulting companies such as Bonfire Infrastructure Group, CobbFendley, and EntryPoint Networks are expanding efforts to make taxpayers pay for networks that will likely have low take rates. And, that sure sounds scarier than any decapitated cavalier haunting Sleepy Hollow.

Agency Mission Creep is Freaking Out Taxpayers and Consumers

It’s understandably frightening to check under your bed (or inside that one spooky closet) for ghouls, gremlins, and creepy crawlies. The same can be said for the Federal Register and the websites of federal agencies. For example, the Federal Trade Commission (FTC) has embraced populist grandstanding at the expense of consumer welfare. Antitrust investigations and enforcement expand by the day and, as a result, companies must think twice before hiring workers, adjusting prices, or doing just about anything else. In the past few months, the FTC and Department of Justice (DOJ) have launched investigations against bulk discounting by grocery stores, enacted broad and costly regulations on employment contracts, and obsessed over the color of text messages.

The antitrust agencies are holding off for now on energy sector scrutiny, but that hasn’t stopped other regulators from embracing a costly climate agenda. In March, Competitive Enterprise Institute Research Fellow Stone Washington wrote in National Review that the SEC’s disastrous new climate-disclosure rule, “compel[s] largely theoretical information on climate risks from an outside stakeholder’s perspective… Public companies and their private suppliers face significant financial costs if the rule is enacted. The SEC estimates a 250 percent increase for disclosure costs from the climate rule alone, raising the annual amount to $10.2 billion.”

Adding to this mission creep is the Consumer Financial Protection Bureau getting into the video gaming world and the U.S. Postal Service spying on law-abiding Americans. Instead of hiding under the covers, Congress should act and rein in this regulatory overreach.

The Credit Card Competition Act: Pennywise Does Not Begin to Describe “It”

Consumers have had plenty of nightmares over the past few years, including goods being 21 percent more expensive than they were at the start of the pandemic. However, one nightmare too scary even for a Stephen King novel has not yet come to pass: the elimination of credit card rewards.

Introduced by Senator Dick Durbin (D-Ill.), the Credit Card Competition Act (CCCA) would heavily restrict or prohibit credit card companies from offering rewards programs.

Banning or restricting these rewards would deal a serious blow to consumers, who rely on card points to finance increasingly expensive trips to vacation or see loved ones. Proponents of the CCCA claim that credit card rewards are causing a “reverse Robin Hood” effect. According to them, low-income households have lower access to rewards credit cards relative to high-income households, while still bearing the costs of interchange fees through higher prices at the counter. Additionally, they claim that these higher prices mean cash and debit users are also subsidizing high-earner’s rewards programs. Proponents also claim that low-income households are more likely to be charged a higher interest rate, so the cost of interest will offset the benefits of rewards programs.

These claims are false. A recent study by the Electric Payments Coalition (EPC) revealed that low, middle, and high-income households earn and redeem credit card rewards at similar rates. Additionally, rewards card offerings for lower-income households have increased to a point where low-income households are equally likely to have a rewards card in their home as higher-income households.

Congress should reject this clownish policy and embrace more penny and pound-wise policies.

Congress Makes Social Media the Boogeyman

With the prospect of undead creatures nearby, no one wants to feel alone in their house. Fortunately, social media platforms such as Instagram, X, and Facebook allow people to feel connected to one another even when the going gets rough. However, that may all change with the passage of some truly frightening legislation.

Introduced by Sens. Richard Blumenthal (D-Conn.) and Marsha Blackburn (R-Tenn.), the Kids Online Safety Act (KOSA) would broadly hold online platforms liable if their design and operation of products and services fails to mitigate wide-ranging societal issues such as mental health, suicide, and addiction. This untenable standard would result in platforms being forced to censor perfectly legal speech, including that of non-minors, fearing the liability repercussions created by KOSA.

Online platforms provide a valuable space where discourse around complex issues that range the political spectrum can occur. However, if enacted, KOSA would disassemble this infrastructure on any issue that any state Attorney General finds harmful to children. For example, debates on the cause and treatment for eating disorders or depression could be censored, resulting in those suffering and searching for assistance unable to find solace or resources.

Congress should stop making social media the boogeyman and focus on more productive ways to help teenagers address the very real problems of depression, loneliness, and anxiety.

Good COP/Bad COP, or Saying BOO! to the WHO

The World Health Organization (WHO) is plenty scary, having pushed for regressive taxes and bans on life-saving devices such as e-cigarettes. Fortunately, TPA has managed to say “BOO!” back to the WHO. In February, the global bureaucracy held its tenth session of the Conference of the Parties (COP10) to the Framework Convention on Tobacco Control to scare governments into restricting vaping, despite ample evidence that e-cigarettes are an effective exit ramp off of traditional cigarettes.

To push back against this harmful narrative, TPA launched its Good COP (Conference of the People) programming in Panama while COP10 was happening. Good COP featured nearly two dozen tobacco harm reduction experts, representing 14 different countries and highlighting some of the leading experts on consumer issues, national and global policies, and the science surrounding harm reduction. The event was livestreamed on TPA’s YouTube channel, allowing observers from around the world the chance to listen to the evidence. This transparency stood in marked contrast to WHO meetings, which are often closed-door. Unfortunately for the WHO, ghosts can move through walls and see through this disturbing lack of transparency.

FOIA Successes, or the Lone Candlelight in the Crypt

The old family crypt is a dark and unforgiving place, filled with mysteries lurking behind old tombs and heirlooms. Thankfully, a little illumination can go a long way toward unearthing unearthly secrets. The sprawling federal bureaucracy can similarly be revealed with the candlelight of well-targeted Freedom of Information Act (FOIA) searches. While the Taxpayers Protection Alliance Foundation (TPAF) has not always been successful in getting the inside (pumpkin) scoop on the inner workings of the government, 2024 has brought more than its fair share of successes.

For example, TPAF recent learned through FOIA disclosures that the Internal Revenue Service (IRS) has likely been overstating the success of the aforementioned taxpayer-funded Direct File tax preparation service. In its “Filing Season 2024 After Action Report,” the agency quotes consumers who had positive experiences with the service and leaves out more negative reviews. After requesting the full array of open-ended responses to the agency’s consumer survey of Direct File, TPAF found plenty of negative feedback about ease of use that the IRS swept under the rug.

In addition, the FDA has been reasonably receptive to TPAF’s requests. Thanks to information provided by the agency, we now know that the Department of Agriculture (USDA) is the culprit behind strict regulations keeping orange juice expensive. TPAF also received critical insight into FDA regulations holding up food safety. There’s even been some juicy records released showing FDA bureaucrats pushing back against the WHO’s war on science and lambasting the global bureaucracy for “disappointing risk communication.” TPAF will continue to light the jack-o-lanterns and fight for federal transparency.

It wasn’t all candy corn and Snickers bars, however. TPAF is still waiting on responses on three FOIAs submitted in 2023 to three different federal agencies. In one such case, the delay in information has been more than one year. The U.S. Government Accountability Office (GAO) found that by fiscal year 2022, the federal FOIA backlog had grown to more than 200,000 requests, continuing a long-term upward trend.

Charter Amendment Goes Ghostbusters on Unaccountable Politicians

There’s no need to watch a mashup of meh sequels to get the gist of the Ghostbusters movies. Without a motley crew of heroes wielding vacuums, ghosts would have their way with the realm of the living. Unfortunately, politicians tend to tax, spend, regulate, and pursue crony deals without “ghostbuster” inspectors general keeping them in line. Baltimore County Inspector General Kelly Madigan has tried her best to keep county officials in line, and in return, local officials have tried to winnow away at the IG Office’s independence and deprive Madigan of the tools she needs to do her job.

A proposed amendment on the ballot for voters this November would codify the IG Office’s independence by establishing guardrails against the role being usurped by petty politicians. If the ballot initiative is successful, Sections 801, 1008, and 1014 of the Baltimore County Charter would be amended to “provide the Inspector General with subpoena power; set qualifications for the Inspector General; and provide for the Office of the Inspector General to be funded as a separate budget entity.” IG Madigan rightly notes, “In voting for Question B, the citizens of Baltimore County will be helping to ensure the Office remains independent and insulated from political influence in the years to come.”

Let’s hope that this ghostbuster has everything she needs to keep the ghouls from haunting taxpayers.

PROTOCOL Act Should Keep the Poltergeists Away

The amount of federal taxpayer dollars being funneled into broadband right now is just plain scary: $42.5 billion through the Broadband, Equity, Access and Deployment (BEAD) Program, in addition to billions more through other funding mechanisms run through various federal agencies. In fact, the GAO is having trouble tracking it all, discovering that there are at least 100 broadband-related programs administered by 15 different federal agencies, with some overlap almost certainly leading to taxpayer waste.

Fortunately, there is a bill for that. Reps. August Pfluger (R-Texas) and Debbie Dingell (D-Mich.), introduced the PROTOCOL Act, which would harmonize broadband coverage maps across government agencies to ensure the government has the most accurate picture of broadband coverage across the U.S. The bill would create a filterable and searchable database to ensure government agencies are not doling out taxpayer money for broadband infrastructure to areas that are already served. Since tens of billions of dollars of taxpayer money is at stake, it is imperative that Congress gives the OK on this bipartisan bill. PROTOCOL would foster transparency in a similar fashion to how the former Recovery.gov website shed light on the thousands of projects created under the Obama stimulus plan 15 years ago. BEAD will also lead to thousands of new broadband infrastructure projects. The PROTOCOL Act will help prevent overbuilding and strengthen efforts to close the digital divide.

TPA hopes that you have a safe and scary Halloween, and that politicians end the spooky specter of ghastly policies.