Has your elected official signed the Taxpayer Protection Pledge?


ATR Supports Bill Ending Marriage Penalty in Child Tax Credit

Posted by Ryan Ellis on Wednesday, July 23rd, 2014, 2:20 PM PERMALINK

The U.S. House of Representatives this week will consider H.R. 4935, the "Child Tax Credit Improvement Act," sponsored by Congressman Lynn Jenkins (R-Kan.)  This bill is a common sense update of the income tax's child tax credit provision, and we urge all Members to vote for it.

Under the tax code, filers with dependent children living with them receive a credit against tax of $1000 for each dependent child under the age of 17.  This credit begins to phase out when adjusted gross income (AGI) exceeds $75,000 ($110,000 in the case of a married filing jointly couple).

There are two issues with the child tax credit which H.R. 4935 addresses:

The credit amount was never indexed to inflation.  The child tax credit was first passed in 1997, and expanded in 2001 and 2003.  Since that time, it has been set at $1000 and never indexed to inflation.  H.R. 4935 corrects that beginning in 2015.

The phaseout limit was never indexed to inflation, and contains a marriage penalty.  The phaseout limits ($110,000 for married couples, $75,000 for most others) were also never indexed to inflation.  In addition, there is a marriage penalty in that the phaseout range for married couples begins at less than double the level for other taxpayers.  The current credit phaseout range creates an incentive for parents to cohabitate rather than get married, even though the tax code should be neutral on such decisions.

H.R. 4935 corrects both problems.  The married phaseout level is set to double the "other" phaseout level ($150,000 vs. $75,000).  In addition, these phaseout rates are indexed for inflation starting in 2015.


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Kurt Zellers and Dean Simpson Sign the Taxpayer Protection Pledge

Posted by Paul Blair on Wednesday, July 23rd, 2014, 12:30 PM PERMALINK

Former speaker of the Minnesota House Kurt Zellers has signed the Taxpayer Protection Pledge in his bid for the Republican nomination as Governor of Minnesota. His running mate, former state Representative Dean Simpson, has also signed the Pledge. The Pledge, sponsored by Americans for Tax Reform, commits signers to oppose any and all efforts to increase taxes.

Americans for Tax Reform offers the Pledge to all candidates for state and federal office. Fourteen governors and over 1,000 state legislators have signed the Pledge. The Zellers/Simpson ticket is the first to sign the Pledge in their bid to secure the Republican nomination and defeat incumbent Governor Mark Dayton.

The Zellers campaign just released an ad highlighting his record of fighting against higher taxes and his personal written commitment to continue to do it as governor. 


“I want to congratulate Kurt Zellers and Dean Simpson for taking the Taxpayer Protection Pledge. Minnesotans deserve better than tax-and-spend policies that fall hard on the backs of hardworking families and small businesses. They want real solutions that create jobs, cut government spending, and incentivize more economic growth,” said Grover Norquist, president of ATR.

“By signing the Pledge, Zellers and Simpson have demonstrated that they understand the problems of hard-working taxpayers in Minnesota.”

“Democrat Mark Dayton raised taxes by more than $2 billion just one year ago. Two years before that he shut the government down over his demand that the legislature raise taxes.  With Speaker Zellers presiding over the House during that time, he stopped Dayton from getting his way.”

"I challenge all candidates and their running mates in the Minnesota gubernatorial race to make the same commitment to taxpayers by signing the Taxpayer Protection Pledge today,” Norquist continued. 

To view a PDF copy of the press release, click here. 

Photo Credit: 
Glen Stubbe, Star Tribune

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Reason.tv and Remy Mock the IRS with a Love Song

Posted by Adam Radman on Wednesday, July 23rd, 2014, 9:30 AM PERMALINK

A few weeks back, I highlighted how Rep. Paul Ryan ripped into IRS commissioner John Koskinen over the IRS scandal involving Lois Lerner and the targeting of free-market groups. The issue at the time came down to the failure of the IRS to produce emails related to the investigation and the inability of the commissioner to explain why the IRS couldn’t retrieve the missing data. The Daily Caller even reported that the failure to produce emails related to the investigation may have violated federal law.

Now, the IRS is singing a different tune. IRS Deputy Associate Chief Counsel Thomas Kane, who oversees document production for the agency, says he’s unsure whether all the backups related to Lerner were recycled and destroyed. However, IT experts for the IRS recently declared under oath that Lerner’s hard drive had been recycled by an outside contractor.

So which is it? Can the IRS produce these missing emails or not? Sometimes the absurdity of it all requires you to step back and just laugh. For that reason, I suggest you check out Remy’s new song: What are the Chances? (An IRS Love Song)

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For State Policy Makers, the Simple (Anti) Tax Solution for Faster Growth

Posted by Dan Mitchell on Tuesday, July 22nd, 2014, 2:03 PM PERMALINK

When people in other nations ask me for evidence in favor of low taxes, I often will ask them to compare the economic performance of a high-tax nation like France with the performance of a nation such as Switzerland with less onerous taxes.

If I’m asked by Americans, I generally suggest that they compare different states. For instance, I show them evidence that California has a much more punitive tax system than Texas. And when you look at all the available state rankings, it’s clear that there’s a big difference.

And I then ask folks to compare economic performance. There’s lots of evidence that Texas is growing much faster and creating far more jobs than California.

Heck, it’s almost as if California politicians want to drive successful people out of the Golden State (fortunately, the state’s politicians didn’t read Walter Williams’ satirical column about putting a barbed-wire fence at the border). And when upper-income taxpayers leave the state, that means taxable income and tax revenue also escape.

Though it’s worth pointing out that the case for low taxes isn’t based solely on comparisons of Texas and California. We know, for instance, that states with no income taxes generally outperform other states.

Moreover, we don’t need to rely on casual empiricism. Here are some of the results from a new study published by the Mercatus Center.

…this study uses the average tax rate as a practical approximation of the overall state tax burden. …The coefficient of average tax rate is negative and statistically significant in both models, suggesting that a higher tax burden as a share of income reduces state economic growth. …Elasticity of −2.6, for example, implies that a 1 percent increase in the tax rate decreases economic growth by 2.6 percent, not percentage points. …While the aforementioned income growth results are insightful, the impact of taxation on the level of income is also important. …income tax progressivity has a significant negative relationship with real GSP per capita. …An alternative way to measure economic activity is to look at the number of private firms that operate in each state. …The main conclusion from the two regression models is that only personal income tax progressivity seems to have a significant negative effect on the growth in the number of firms. … By voting with their feet, people send a clear signal about where they prefer to live and work. …an empirical analysis of migration may show, indirectly, how taxes affect the flow of economic activity across states. …state net immigration rate is negatively related to the personal income tax rate … The net immigration rate also seems to have a significantly negative correlation with the average tax rate and income tax progressivity.

These findings should not be a surprise.

It’s common sense that economic activity – and taxpayers – will flow to states that don’t punish people for creating wealth.

Let’s now circle back to the Texas-vs-California comparisons. Take a look at this remarkable chart put together by Mark Perry of the American Enterprise Institute.

As you can see, total employment in Texas has jumped almost 10 percent since 2008. In California, by contrast, total employment has increased by less than 2/10ths of 1 percent.

So you can see why this Lisa Benson cartoon is so appropriate.

Speaking of humor, this Chuck Asay cartoon speculates on how future archaeologists will view California. And this joke about Texas, California, and a coyote is among my most-viewed blog posts.

All jokes aside, none of this should be interpreted to suggest that Texas is perfect. There’s too much government in the Lone Star state. It’s only a success story when compared to California.

And even though California does worse than Texas in my Moocher Index, it’s worth pointing out that Californians are the least likely of all Americans to sign up for food stamps.

Editor's Note: This article was originally posted on Individual Liberty and was republished here with permission.

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Hey Grover... how is the massive illegal immigration surge that you support coming along... just fine... just fine... many more new welfare recipients to provide cheap labor for your corporate clients, right you slime bag?

Please spare me the drivel about taxes when you support an invasion of illegals that need and like welfare....

EPA Moves to Scuttle Alaskan Pebble Mine

Posted by Cassandra Carroll on Monday, July 21st, 2014, 2:43 PM PERMALINK

Underneath picturesque Bristol Bay in Southwestern Alaska sit vast deposits of an estimated $300 billion worth of molybdenum, copper and gold. The waters of Bristol Bay hold the largest sockeye salmon fishery in the entire world, as well as huge populations of silver, chum, and king salmon. It is obvious that Bristol Bay is home to unbelievably valuable natural resources which could be used to create prosperity for Alaska as well as the rest of the country. Certainly, the area is delicate; a large number of local jobs rely on fisheries, and many of the residents rely on wild resources such as salmon, caribou and moose to survive. All this being said, you’d think the federal government and EPA would be interested in fostering cooperation between itself, industry, and the residents of Bristol Bay and the surrounding areas to take advantage of all this opportunity while protecting the local people and ecosystem, right? Well, not necessarily.

The Pebble Mine is a project proposed by the Pebble Partnership that would make use of the currently unutilized deposits of gold, copper and molybdenum in Bristol Bay. Before the project can start, however, Pebble Partnership will have to spend a lot of time and money acquiring permits, which is where the EPA comes into the story. Normally, when a mining project is proposed, the company who plans to do the mining applies to the Army Corps of Engineers for a permit that certifies the project complies with section 404 of the Clean Water Act. Assuming the Corps of Engineers grants the permit, the EPA then has the authority to veto it if they deem the project to be too great a risk to the environment, or, more recently, too great a risk to the EPA’s increasingly partisan politics.

And it looks like Pebble Mine’s permit might be well upon its way to being denied before it’s even applied for. The EPA has already begun to propose drastic restrictions on how the land can be used. Technically this is not a preemptive strike, but it certainly looks like one in effect. The restrictions are based on a precarious report that made a number of false assumptions about the Pebble Mine. The House Oversight Committee even has reason to believe that Philip North, a former EPA employee, had already been making plans with colleagues in 2009 to deny Pebble Partnership a permit before they even applied for it, and even before the research on the mine’s potential impacts had begun. This is currently being investigated, but Philip North has not been reached for comment, citing a number of excuses, such as a one-year boat trip around the world with his children. When subpoenaed for North’s emails, the regional EPA office conveniently claimed that they’d been lost in a hard drive crash. Sound familiar? (http://thehill.com/policy/energy-environment/210564-epa-says-hard-drive-crashed-emails-lost )

Speaking about the potential mining project, EPA Region 10 Administrator Dennis McLerran said, “The science is clear that mining the Pebble deposit would cause irreversible damage to one of the world’s last intact salmon ecosystems.” That doesn’t sound like someone who wants to have an objective discussion. It also presumes that there’s nothing the Pebble Partnership can do to sway the agency, even though they are yet to submit their permit application.   

Pebble Mine has potential to be a great benefit to local Alaskan communities, particularly the native population. Maybe the mine would work in harmony with the locals and wildlife, and improve the lives of thousands of Americans. Maybe the mine really would be too great a risk to the environment, and should be abandoned. Either way, we all knew when our parents said things like “You can’t because I said so, and that’s the end of this conversation!”, it was often because they knew their arguments wouldn’t stand up to even a child’s scrutiny. So when the EPA essentially does the same thing to a mining company, it leaves us all to wonder. Why are they so afraid of a little discussion?

Photo Credit: 
Silverback Photo

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Aussies Throw Carbon Tax on the Barbie, U.S. Should Do the Same

Posted by Brendan Walsh on Monday, July 21st, 2014, 2:07 PM PERMALINK

Thursday, July 17th Australian Prime Minister Tony Abbot and his conservative government followed through on one of its promises to the people during the previous election to repeal the country’s Carbon Tax that was constricting the economy. While the left and environmental groups will undoubtedly clamor about the recent Senate vote (39-32) to repeal the carbon tax, there is little doubt that the Australian government did the right thing.

Australia’s carbon tax cost the country billions of dollars each year, draining the Australian economy of approximately $8.5 billion annually all while forcing ordinary families to pay more than an average of $500 more for power each year. With the repeal of the often maligned carbon tax, Australia has repositioned itself as a safe place for investment in crucial industries such as mining. Furthermore, by eliminating the carbon tax, Australian businesses and families will have an unnecessary burden lifted off their shoulders, paving the way for more jobs and future economic growth.

The United States can and should take note of Australia’s decision to repeal the carbon tax if it wants to protect itself from skyrocketing energy prices. While the Left and environmental groups in the U.S. continue to push for Cap and Trade and various forms of carbon taxation, they fail to apply basic economics in their rational. Simply put, by taxing carbon indiscriminately it increases the cost of business for that company, therefore reducing profits and threatening jobs. However, the negative externalities do not end there. The increase cost of business due to carbon taxes are sent along the supply chain, leading to the prices of inputs and commodities to increase. These increased costs are eventually passed on to taxpayers like you not only when you go to fill up your tank, but when you go to buy that carton of milk from your local grocery store as well.

On June 2nd 2014, the EPA officially released its new draft rule to force power plants to cut carbon emissions by 30% (from levels of 2005) by the year 2030. This ideologically driven mandate will have dire consequences on the U.S. economy. The administration’s climate agenda is poised to devastate the US economy. As Amy Harder of the Wall Street Journal notes, coal produces more carbon dioxide than oil and natural gas but it is by far the most abundant and cheap source of energy in the U.S. Coal, which provides 40% of electricity in the United States and the new regulations threaten to not only raise the cost of electricity but also threaten jobs in the industry.

The Chamber of Commerce analyzed a similar rule as the EPA’s and found that such regulations would cost the U.S. economy an average of $51 billion annually. From 2014 to 2030 that is an estimated $816 billion drain from the U.S. economy. Additionally, the report notes that the carbon regulation’s would cost the US 2,224 jobs annually through 2030, which means in total it would cost the US approximately 3,584,000 jobs. Furthermore the Chamber notes that energy costs for US taxpayers would increase by $289 billion, and reduce the amount of disposable income for families by approximately $596 billion. Simply put, given the failing economic recovery, the U.S cannot afford losing an additional $816 billion from the country’s GDP, nor does it make sense to prevent millions of Americans from finding jobs, or increase energy costs for households which hurt the least wealthy most of all.

Australia has shown the US a way to escape the grasps of over burdensome regulations pushed by the ideologically driven left that constrict economic growth and prosperity and now the U.S. must follow if it wishes to remain among the most competitive countries in the world.  


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Contrasting Records a Feature of the North Carolina Senate Race

Posted by Patrick Gleason, Jorge Marin on Monday, July 21st, 2014, 10:00 AM PERMALINK

Most state legislatures have wrapped up their 2014 sessions and the November elections will be here sooner that many realize. North Carolina is one of the top political battlegrounds this fall, with embattled Senator Kay Hagan (D) fighting for her political life against her Republican opponent, North Carolina House Speaker Thom Tillis. Politico reported last week faces one of the toughest reelection races for any Senate Democrat this year, a true toss-up fight against North Carolina House Speaker Thom Tillis.”

Hagan has made clear that her campaign strategy is to score political points by painting Tillis as a conservative zealot whose record in the legislature is extreme. However, a look at the facts about Tillis’s top achievements as Speaker’s shows his record to be anything but extreme, and very much in line with pro-growth policies. Here are the highlights of what has been accomplished in the North Carolina legislature under the leadership of Thom Tillis:

  • Historic, rate reducing tax reform: last year Speaker Tillis helped bring the income tax rate down from a top rate of 7.75 percent to a flat rate of 5.75 percent, reducing taxes for all income levels. This pro-growth tax package relieved North Carolina of the dubious distinction of having the highest income tax in the Southeast and will provide North Carolinians with $6.475 billion in tax relief over the next 6 years. Tillis also cut the state corporate tax, one of the most economically damaging forms of taxation, from 6.9 percent to 5 percent. If revenue targets are met, the rate will go down to 3 percent by 2017.
  • Full repeal of death tax
  • Balanced the budget every year he has been Speaker
  • Since becoming Speaker in 2011, unemployment in North Carolina has gone from well above the national average to below it, from  9.7 percent to 6.4 percent.
  • North Carolina’s GDP grew by an average of 4.73 percent since Tillis became Speaker, while the nation as a whole grew by only 2.17 percent during the same period.
  • Last August, North Carolina enacted much-needed regulatory reform, which removed many of the state’s antiquated and burdensome regulations on businesses.
  • Tillis helped to shepherd through an expansion of the state’s school voucher program which has helped over 2,100 children escape failing schools and get a better education.


With a list of accomplishments like this, it’s going to be hard for Hagan to paint Tillis’s record as extreme, but it seems she is going to try. However, it’s not surprising that Hagan wants to focus on Tillis and not her own top legislative achievement, which is her vote for Obamacare and the 20 federal tax increases it imposed on North Carolinians.

A rally for Tillis supporters was held in Raleigh this past weekend (link). With state budget negotiations coming to a conclusion, North Carolina Republicans are now able to turn their attention to addressing the misinformation being spread by the Hagan campaign. Not all North Carolinians can keep their doctor under Obamacare, contrary to what President Obama and Sen. Hagan claimed. The good news is that they can elect a new senator this November.

Photo Credit: Mark Peterson

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ATR Endorses Sen. Toomey's Highway Amendment to Help Rebuild Disaster Areas

Posted by Chris Prandoni on Friday, July 18th, 2014, 4:02 PM PERMALINK

Americans for Tax Reform (ATR) endorses Sen. Toomey’s highway amendment (S. amdt. 3564) that streamlines the construction of bridges, roads, and highways that were damaged during disasters. All too often, byzantine environmental laws unnecessarily delay repairs to essential infrastructure. The Toomey amendment allows roads, highways, and bridges to bypass a number duplicative regulations and permitting requirements so long as they are rebuilt with identical characteristics (capacity, dimension, and design).

Speaking in support of the Toomey amendment, ATR president Grover Norquist said “complicated regulations not only increase the cost of infrastructure projects but delay their construction. Sen. Toomey should be applauded for remedying both of these problems when Americans have the least amount of patience for either — after disasters. If Congress is going to have any chance at reforming the highway trust fund, we’ll need more solutions like this one.”

Photo Credit: 
John Lloyd

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Corporate Inversions Caused by High U.S. Tax Rate on Companies

Posted by Ryan Ellis on Friday, July 18th, 2014, 12:17 PM PERMALINK

There's a lot in the news this week about "corporate inversions."  That's when a U.S. company with a foreign subsidiary becomes a foreign company with a U.S. subsidiary.

Not surprisingly, Congressional Democrats are out demonizing these companies for daring to look out for their shareholders, employees, and customers.  What you won't hear many Democrats talk about is why these companies feel compelled to do an inversion in the first place.

In a word, it's all about the U.S. corporate tax rate, plus a few other details.

The U.S. has the highest tax rate on businesses in the developed world.  Our corporate tax rate (including states) is 39.1 percent.  Flow-through firms face an even higher rate, approaching 50 percent depending on their state.

Compare this to business taxes overseas, which average about 25 percent in the developed world.  

Each of our major trading partners--Canada, Mexico, Japan, the United Kingdom, Germany, and France--have business tax rates lower than ours.  There are also minor trading partners (Ireland and the Netherlands being good examples) who have significantly lower rates and have been attracting capital recently.

Combine this with the fact that the U.S. has a worldwide tax regime (exposing our companies' profits earned abroad to potential double taxation) and painfully slow cost recovery tax rules, and you have created an atmosphere where corporate inversions become very attractive.

If you want to reverse this trend, there's only one way to really do it--lower the tax rate that businesses pay.  At the very least, companies here should not face a tax rate higher than the 25 percent average rate they would face elsewhere in the developed world.

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Better yet, reduce it to a flat 10% and the economy of the US will immediately start picking up. Caution though...the reduction of that rate must NOT be offset by citizens paying the difference...like it works here in Texas. Texas, despite what's reported, is NOT a low tax State.

DC Council Approves Historic Tax Cuts

Posted by Alexander Bobroske on Thursday, July 17th, 2014, 4:35 PM PERMALINK

Earlier this week the DC Council voted 12-1 to override Mayor Vincent Gray’s budget veto. The budget vetoed by Mayor Gray includes historic tax cuts not been seen by DC residents in 15 years. Americans for Tax Reform applauds the DC City Council for restoring this much needed tax relief for District residents.

The budget includes triggers for tax cuts if revenue targets are met, providing tax relief for District employers and residents. Key provisions of the plan include the following:

  • Middle class taxpayers (making between $40,000 and $350,000) will see their top marginal tax rate drop from 8.5 percent to 7 percent next year and then 6.5 percent the year after that.
  • Those earning up to $1 million will see their top rate fall from8.95 percent to 8.75 percent.
  • Increase of standard deductions and person exemptions.
  • Childless low-income workers will see their Earned Income Tax Credit increase from 40 to 100 percent of the federal credit.
  • The business tax will drop from 9.975 to 9 percent in 2016, 8.5 percent by 2018, and finally to 8.25 percent by 2019. This places DC business taxes in line with Maryland’s.
  • Death tax threshold will increase from $1 million $5.25 million to match the federal death tax exemption threshold.


The $225 million tax cut is offset partially by the $67 million in new revenue from expansion of the sales tax base, leaving the majority of tax relief facilitated by spending restraint in the $10.6 billion budget, down from $12.85 billion in FY 2014.

There has been a lot of uproar over the alleged yoga tax included in the budget. But District yogis should fear not. There is no special wellness tax going into effect; the new tax plan merely applies the local sales tax to yoga and gym glasses, along with other previously exempt services. The amount of income tax cut far exceeds higher sales tax collections that this base broadening will generate. This newly increased disposable income will allow Washingtonians to afford even more yoga sessions.

The DC Council should be commended for clamping down on Mayor Gray’s expensive pet projects, such as his citywide streetcar service plans. Former mayor and current councilmember Marion Barry recently stated that taxpayers would have to pay $2,000 to subsidize each ride on the only existing streetcar line, a line which is yet to open even after years of planning and construction.

It appears that Washington’s business tax climate has become so onerous that even the DC Council realizes the status quo is unacceptable.  ATR applauds the DC Council members for overriding Mayor Gray’s veto of much-needed tax relief. After being hit with over 20 federal tax hikes signed into law by President Obama over the last four years, Washingtonians need tax relief at the local level now more than ever.

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