Anti-Business Governor Jay Inslee Forces Emerging New Vapor Business to Relocate from Washington to Arizona

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Posted by Paul Blair on Tuesday, June 2nd, 2015, 5:09 PM PERMALINK

Mount Baker Vapor, an electronic cigarette and vapor product business based in Bellingham, Washington announced today that they would be relocating their business operations to Mesa, Arizona “due to legislative pressure.”

In their announcement they explain, “Legislative pressure from Washington State has made it clear that they no longer offer a suitable environment for a growing business in the vaping industry.”

That pressure has come in the form of proposal to ban online sales and the imposition of astronomical taxes ranging as high as 95 percent, both proposals from Democrat Governor Jay Inslee.

“These bills are a clear existential threat to our business,” they explain. “Even if the bills did fail, Governor Inslee has another year left in office and has made it clear that he will continue tormenting our industry.”

The vaping industry and the consumers who are using the products have been a top target for state lawmakers since the products began gaining popularly among smokers looking for an effective way to quit with a healthier alternative product.

Electronic cigarettes and vapor products don’t contain the tar or countless carcinogens that can produce cancer, illness, and disease. Where some see a new technology that is helping people quit smoking, cash-hungry politicians like Gov. Inslee in Washington see a new target to tax.

Click here for a map of where threats of higher taxes on e-cigarettes stand in the states.

An analyst for Wells Fargo estimates that e-cigarette sales will top $10 billion by 2017 and could overtake combustible cigarettes within a decade. Among those looking to prevent that growth are politicians like Gov. Inslee and bureaucrats at the Food and Drug Administration (FDA).

Click here to read more about the FDA and e-cigarettes.

Arizona is far friendlier to businesses than states like Washington. Governor Doug Ducey (R-Ariz.) ran for office on the platform of significantly reducing the income tax. He’s rejected Nanny-State proposals like plastic bag bans and cut spending by hundreds of millions of dollars in just one year.

“I want Arizona to be the best state in the country to work and do business,” Ducey remarked in March.

Mt. Baker Vapor’s move to Arizona makes it clear that businesses looking to escape high taxation and unnecessary regulations have a friend in Gov. Ducey and the state of Arizona. NJOY, another company that produces and sells e-cigarettes and vapor products is also headquartered in Arizona. 

Though a Democrat lawmaker proposed imposing sin taxes on e-cigarettes this year, the bill got no traction, didn’t’ come up for a vote, and garnered no support from the governor.

Mt. Baker Vapor employs more than 100 people in Washington and expects to be fully operational in Arizona later this year. 

Might Arizona become the Silicon Valley for electronic cigarette companies looking to relocate to more business friendly states? Only time will tell. 

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Well, shoot, there they go. Yes, I vape in Washington, and this is disappointing to me as I thought we were still fighting....even though Inslee has commanded a second special session, and he and the AG did stick the two godawful vaping bills back in there.
I was at least hoping they'd wait until the FDA came out (of hiding). And I can't, and won't surrender.


Vaping is going to be a huge industry, in the 100s of billions of dollars globally. States that roll out the welcome mat will get new business formation, taxes, and jobs. The ones that don't....

Tom Blackwell

Washington State, where it is perfectly legal to sell a sack of weed but if you sell eliquid you get ran out of town.

Norquist Testifies on Tax Nexus, The Marketplace Fairness Act is Still Bad News

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Posted by Katie McAuliffe on Tuesday, June 2nd, 2015, 4:12 PM PERMALINK

President of Americans for Tax Reform, Grover Norquist, testified before the House Committee on the Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law. Mr. Norquist expressed support for the Business Activity Tax Simplification Act, the Digital Goods and Services Tax Fairness Act, and the Mobile Workforce State Income tax Simplification Act.  While these bills were the topic of the hearing, the discussion quickly turned to online sales tax.  Mr. Norquist expressed that the marketplace Fairness Act or anything similar is still unacceptable.  Any legislation regarding sales tax must maintain the origin principle of physical nexus.

You can read the official testimony here.

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Congress Punts on the Highway Trust Fund

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Posted by Kendyll Ferrall on Tuesday, June 2nd, 2015, 3:43 PM PERMALINK

Last week, President Obama signed a two-month extension for the Highway Trust Fund (HTF). The Highway and Transportation Funding Act of 2015 was passed two days before funding was set to run out and marked the 33rd stopgap funding measure for the HTF within the last ten years. Congress has been given the opportunity to truly reform the HTF and practice fiscal responsibility, but instead the government has chosen to use our nation’s infrastructure crisis as an excuse to raise taxes on Americans. 

The most recent round of debates over the way the government fund’s the HTF highlights Congress’ increasingly common practice of kicking the legislative can down the road as an alternative for actually dealing with an issue. The issue at hand is not that the HTF is underfunded or that the current tax fails to meet the rise in inflation, the real problem is wasteful and out-of-control spending. 

With the decline of fuel prices over the last year, many members of Congress have used falling prices as an excuse to propose raising the gas tax in order to make up for the $16 billion deficit in the HTF. Along with the 24.4 cents per gallon diesel tax and other excises, the 18.4 cent per gallon gas tax is the main source of revenue for the HTF. The gas tax adds $34 billion to the HTF annually, but its contribution falls short of the $50 billion spent by the government each year

A common sense solution to the way our highways are funded would be to rein in spending, but some members of Congress would rather increase the gas tax by as much as 80 percent than address the larger issue of wasteful spending at the expense of the taxpayers. Since the 1990’s, the government has overspent in the name of the HTF, using the funds to pay for landscaping, bike trails, trolley rides and even squirrel sanctuaries. According to the Congressional Budget Office, the tax would need to increase by 10 to 15 cents a gallon to maintain the current levels of spending. 

According to the Wall Street Journal, the HTF would be 98 percent solvent if the taxes collected for the HTF actually went to funding for highway projects. Meaning if Congress would actually use the funds allocated for the highway for highway expenses, then there would be no need to even consider raising the gas tax. Using taxpayer funds the way they are intended to be used is apparently a revolutionary idea to Congress. 

For the next two months, Americans are safe from a hike in the gas tax, but a group in the House is working to make sure that the end of July is accompanied by a major tax increase. Congressman Jim Renacci (R-Ohio) introduced the Bridge to Sustainable Infrastructure Act last month that would increase the gas tax by a whopping 67 percent. Co-sponsored by Democrat senators Bill Pascrell (N.J.) and Dan Lupinksi (Ill.), the massive tax increase would almost exclusively target low- and middle-class Americans as the tax naturally affects these socioeconomic groups more so than wealthy Americans. 

Despite Renacci’s plan to raise a tax that has not been raised in over 20 years, there are efforts in the Senate to combat any proposed plans similar to Renacci’s. Senators Tom Carper (D-Del.) and Dean Heller (R-Nev.) are working on a plan that would pair any tax increase with income tax breaks that would benefit the same group of Americans who are adversely affected by the gas tax. While an increased earned income tax credit (EITC) would be a revenue-neutral approach, Republican Leadership has resisted the idea with the exception of House Speaker John Boehner (R-Ohio) who came out strongly opposing any legislation that would raise the gas tax. 

Ryan Ellis, tax policy director for Americans for Tax Reform, argued that a deal to counteract a tax increase would be difficult to work through Congress because of the lack of leadership support. Calling the proposed tax increase “radioactive,” Ellis referenced an overwhelming ballot defeat by Michigan voters back in May that would have paired an increase in state levies, including Michigan’s gas tax, with an increase in the EITC

The Obama Administration has not shied away from weighing in on the nation’s infrastructure funding problem, proposing a plan that would raise taxes on offshore, multinational corporations in order to maintain Congress’ frivolous spending habits, but Senate Majority Whip John Cornyn (R-Texas) said last month that the White House’s plan would not be considered by Senate leadership. 

Come July, Congress will have the chance to pass a meaningful, long-term funding bill for the HTF for the first time since 2005. Congress should spend the next two months working on a plan to reduce spending and reform the way HTF funds are used, not proposing tax increases that will hit the majority of Americans the hardest. 

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Bridge to Nowhere, Meet the Empty Base

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Posted by Danil Zelenkov on Tuesday, June 2nd, 2015, 3:30 PM PERMALINK

Every government department wastes taxpayer dolalrs. The Department of Defense is no exception. Although there is no doubt that our armed forces have kept America safe, an unlimited bank account lends itself to waste and abuse.The construction of the 64,000 square foot base at Camp Leatherneck in Afghanistan is a textbook example.

When President Obama announced the surge of 33,000 troops in Afghanistan in 2009, several commanders insisted that the facility was not needed at all. The Marine Corps General said “I don’t want it, don’t build it, I won’t use it. So stop construction”. He wasn’t alone.

An Army general who preferred to stay anonymous also said that he cannot comprehend the idea behind the construction of the unnecessary facility. Nonetheless, the military brass believes that the building was not necessarily essential, but the funding was already approved by Congress and in the ‘use it or lose it’ Washington environment, the Pentagon decided not to give up the money. The construction of the command center ‘Taj Mahal’ proceeded as planned.

Special Inspector General for Afghanistan John Sopko is investigating this case along with many others which symbolize “the staggering cost of Pentagon mismanagement”. The facility now stands: built and ready, but devoid of any troops. In NPR, Sopko observes that:

The joke in my office is, we will eventually see a base where on one side of the base they’re destroying it, while on the other side they’re building it. And they will probably meet in the middle.

In a time of exploding federal budgets, we cannot afford further budgetary adventurism. This criticism comes in the wake of Congressman Burgess’ (R-Texas) efforts to audit Pentagon’s finances. Unlike other government agencies, the Pentagon has not undergone a proper audit for more than two decades.  An end to the ‘no questions asked’ mentality towards military expenses is long overdue.

The US deserves to have the best military in the world, and out of control spending only ties up resources that could be better used to keep the nation safe. 

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IRS Watchdog: Agency Failed to Heed Taxpayer Data Breach Warnings

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Posted by Alexander Hendrie on Tuesday, June 2nd, 2015, 3:27 PM PERMALINK

 Last week the IRS disclosed that hackers had stolen the personal tax information of over 100,000 households and used it to file fraudulent tax returns. If the IRS had taken the necessary steps to safeguard taxpayer data, it is possible the hack could have been prevented. Over the past decade, the IRS was repeatedly warned by watchdog groups it needed to increase its protection of taxpayer information.  

Over the last decade the IRS has failed to implement numerous recommendations that would make taxpayer information more secure.  At a Senate Finance Committee hearing today Treasury Inspector General for Tax Administration (TIGTA) Chief J. Russell George revealed that the IRS failed to implement 44 recommendations that would improve the IRS’s ability to protect taxpayer information from hackers. Of these 44, ten recommendations were from audits over three years old.

If the IRS had implemented these recommendations, taxpayer information would be better protected and last week’s hack may have been prevented. As George said during today’s hearing, “It would have been much more difficult had they (IRS) implemented all of the recommendations that we made.”

Since 2007, the IRS has been warned at least seven times by watchdog groups that it needed to strengthen its protections of taxpayer information.

In a 2014 report, TIGTA warned that if stronger protections are not implemented, “taxpayers could be exposed to the loss of privacy and to financial loss and damages resulting from identity theft or other financial crimes.”  The report was the latest in a series of warnings about the agency’s inability to protect taxpayer information.

A 2013 report found that the IRS had failed to fully implement eight recommendations that would increase security over taxpayer data despite telling TIGTA they had been implemented. A 2011 report found that taxpayer data was vulnerable to hackers and stronger security measures were needed and in 2010, TIGTA found that the agency had inadequate safeguards to protect taxpayer information from contract workers.

Instead of modernizing its system to protect taxpayer information from hackers, the IRS wasted taxpayer dollars by purchasing Nerf footballs that were never used, the world’s largest crossword puzzle, $100 lunches, and Thomas the Tank Engine Wristbands.

The IRS has also repeatedly failed to produce tax complexity reports despite being legally required to do compile one each year. As the National Taxpayer Advocate noted in its Annual Report to Congress, the agency has only ever completed two reports, in 2000 and 2002. The IRS says it requires “about two full time employees working for about a year” to complete the report, which it apparently cannot find despite having over 82,000 full time employees.

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EPA Seeks to Crush Hardworking Americans

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Posted by John Beattie McEwan VI on Tuesday, June 2nd, 2015, 3:15 PM PERMALINK

Gone are the days when the Environmental Protection Agency was completely irrelevant in the average American’s life. Today, the EPA has become a strict regulatory body, and a favorite political arm of President Barack Obama. This past week, the EPA announced they would be increasing their efficiency requirements for heavy trucks while broadening their coal regulations in several ways.

Forbes reported that the EPA was seeking to require heavy truck’ fuel efficiency from 5 to 6 miles per gallon of diesel fuel, to 9 miles per gallon. Their logic is simple. By necessitating the use of more efficient trucks, the EPA is leaving drivers with two options: buy a new truck that meets that standard, or not drive at all. The EPA claim the added cost and burden of buying a new truck is negligible, given that drivers will ultimately save enough on fuel after a certain period of operating the new vehicles.

But this assertion seems hopeful at best.

The cost of the new engines that companies and individuals must buy to meet the 9 miles per gallon standard will likely be significantly higher than current engines, since they will all be brand-new, cutting edge pieces of technology. However, that is presuming that the cost of fuel does not rise in the prescribed period.

And who is to say that their trucks could even be outfitted for the new engines? Certainly not the EPA. Their assertion becomes even less likely to fit the truth when considering how much fuel and truck maintenance already cost. According to a report by Glostone, truck payment costs accounted for 18.9 cents per mile in 2011 compared to an average cost of 18.4 cents per mile in 2010. Many fleets eliminated more expensive units between these years and are now operating smaller fleets. The new EPA requirements will force companies to downsize their fleets even more in order to pay for the new, more expensive engines. This will ultimately result in fewer trucking jobs, and more expensive products for the American consumer, whom relies heftily on the trucking industry for goods.    

The new regulations also call for greater restrictions on coal production plants. The EPA hopes to reduce the amount of active coal plants by 30%, citing the need for less pollution in American waterways. The Daily Caller reported that this will reduce electrical output by nearly 90 gigawatts over five years. According to a report from the Institute for Energy Research, 72 gigawatts of electricity could power 44.7 million homes – or every home in every state west of the Mississippi river, excluding Texas. Their estimate is lower than the 90 gigawatts the EPA hopes to eliminate, but serves as a reference point for just how much energy could be removed from the power grid.  

The retirement of these coal plants not only reduces potential electrical output, but also directly impacts coal producing states, which will inevitably see a direct hit on their economies and number of available jobs. According to the U.S. Energy Information Administration, five states account for 69% of the total U.S. coal production. Wyoming and West Virginia make up 39% and 12% respectively.

In Wyoming, coal miners accounted for 6,516 workers and generated more than $1.1 billion in tax revenue for their state and local governments. In West Virginia, coal miners accounted for 19,427 workers and generated more than $490 million in tax revenue for their state and local governments.

The regulations placed on coal mining states like Wyoming and West Virginia will result in fewer available jobs for their workers, in addition to the jobs they will lose from these regulations. These states will also have to come up with the loss in tax revenue elsewhere. This creates greater burdens on both the state and families who must now contend with these losses.

So who stands to benefit from the new EPA regulations? Clearly not American workers or the economy.  

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Budget Deal Would Raise Connecticut Taxes Even Higher

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Posted by Nathaniel Rome on Tuesday, June 2nd, 2015, 3:01 PM PERMALINK

This week, Connecticut lawmakers will vote on a proposed budget deal made between Governor Dannel Malloy and Democratic leaders in the legislature. The agreement they reached includes higher taxes on individuals and businesses in a state that already has the nation’s third highest state and local tax burden. Connecticut taxpayers give nearly 12 percent of their income on average to state and local governments. That burden will rise if this new budget deal is signed into law.

During his campaign for reelection last year, Gov. Malloy promised not to raise taxes.  Malloy’s about-face on taxes since the election is largely a result of his new ambitious infrastructure plan, which would cost Connecticut taxpayers $100 billion over the next three decades.

The tax changes in the deal include raising the top income tax rate from 6.7 percent to 6.99 percent. Additionally, the sales tax on computers and data processing – one of the cores of a modern, innovative economy – will triple, from 1.0 percent to 3.0 percent. Another major change is the adoption of a unitary corporate tax, which would tax companies on out-of-state earnings. Many businesses that operate across state borders would now have to pay significantly more Connecticut taxes, leading critics to fear that businesses may flee the state.

The new tax proposals in the budget deal have business leaders balking. “I completely cannot understand the rationale. … This is only going to set Connecticut backwards,” said Joseph Brennan, president of the Connecticut Business and Industry Association. General Electric, one of the state’s largest employers, issued a statement in response to the deal, stating that they are being forced to “seriously consider whether it makes any sense to continue to be located in [Connecticut].”

Connecticut has seen their citizens pack their bags and leave the high-tax state in droves. In 2013, a net 17,000 people left the state, one of the highest net migrations in the country. Overall, the state’s population growth since 2010 has been one of the lowest in the country. Senate Republican Leader Len Fasano fears that the new tax deal may exacerbate the problem, stating that “I fear that this budget will be the last straw for many.”

As a state already struggling from high taxes, this deal would only make matters worse for Connecticut taxpayers and job creators. As Leader Fasano put it, “Connecticut cannot afford any new taxes.” After being hit with more than 20 federal tax increases over the last five years, and just four years after the passage of two dozen state tax hikes, the last thing Connecticut taxpayers and the state’s economy need is for lawmakers in Hartford to pile on with even more job-killing tax increases at the state level. 

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Nevada Legislature Vetoes Voters and Passes Largest Tax Hike in State History

Posted by Paul Blair on Monday, June 1st, 2015, 6:37 PM PERMALINK

Last night, by a vote of 30-10, the Nevada state Assembly joined the Senate in approving a $1.5 billion tax hike over the next two years. Governor Sandoval sought at least $1.1 billion in new revenue to fund the expansion of Medicaid, higher education spending, and corporate handouts to companies like Tesla immediately after winning re-election last year. The legislature gave him even more than he asked for when the Senate sent him the tax hike bill this afternoon. 

When the question of whether Nevada should impose a margins tax on businesses in the state to fund increased education spending was put before Nevada voters last year, they rejected the “Education Initiative” by an 80-20 margin.

The margins tax, if approved, will jeopardize Nevada’s recovery,” Gov. Sandoval said last year when he too opposed one of the worst elements of this year’s budget bill.

Gov. Sandoval told voters that he opposed tax hikes so that he could get re-elected. Unfortunately, the legislature let him get away with it.

Here’s a list of the tax hikes:

  • Higher state business license fee
  • Higher payroll/modified business tax
  • Higher payroll/modified business tax; even higher on mining
  • New “Uber” tax on ride-sharing customers
  • New tax on taxis and limousines
  • Higher Live Entertainment Tax on auto racing and concerts
  • A 125% increase in the cost of a pack of cigarettes
  • Higher tax on elk hunters car owners (registration fee)
  • Higher sales tax


Every Democrat in the Assembly and the following Republicans voted for the largest tax hike in Nevada history: John Hambrick (violated the Taxpayer Protection Pledge with yes vote), James OscarsonDavid Gardner, Erv Nelson, P.K  O’Neill, Steven SilberkrausDerek Armstrong, Glenn Trowbridge

None of them ran on raising taxes last year. All of them were elected and re-elected on false pretenses.

Assembly Republicans who voted against the tax hike included: Michele Fiore, Victoria Seaman, Brent Jones, Ira Hansen, Jill Dickman, Chris Edwards, Shelly Shelton, Robin Titus, Jim Wheeler and John Ellison. Senate Republicans who opposed the final bill included: Pete Goicoechea, James Settelmeyer, and Don Gustavson. 

"The leadership of both houses should be ashamed of themselves for forcing through the largest tax increase in history," said Sen. Gustavson of the vote. 

ATR applauds those legislators who opposed Sandoval's proposals and thanks them for standing with taxpayers by voting no. 

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ATR Supports the TSCA Modernization Act

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Posted by Alexander Hendrie on Monday, June 1st, 2015, 3:55 PM PERMALINK

The House Energy and Commerce Committee will vote tomorrow on H.R.2576, the “TSCA Modernization Act” introduced by Congressman John Shimkus (R-Ill.). This bipartisan legislation modernizes the outdated and inefficient Toxic Substances Control Act (TSCA) with common-sense reforms that protect consumers and encourage innovation and commerce. ATR supports the TSCA Modernization Act and urges both the Energy and Commerce Committee and the full House of Representatives to vote for and support this important legislation.

TSCA was enacted in 1976 to regulate the production and distribution of chemicals in America. Nearly 40 years later, TSCA remains nearly unchanged and is in need of reforms to increase the efficiency with which chemicals are reviewed and distributed throughout the U.S. 

H.R. 2576 contains a number of necessary reforms that will improve TSCA. First, the bill implements a robust yet streamlined chemical review process that increases consumer protections. It does so by taking health and environmental concerns into consideration based on the best available science instead of costs.

Currently, chemical manufacturers face a patchwork of confusing and inconsistent regulations from state to state. This has created burdensome compliance requirements and uncertainty for businesses. H.R. 2576 helps resolve this uncertainty by providing a stronger and more cohesive national chemical regulatory program that streamlines interstate commerce.

TSCA as it exists today is an inefficient and outdated regulatory system that creates uncertainty and burdens on commerce, which in turn impacts consumers and the economy. H.R. 2576 will provide a desperately needed update that protects consumers, encourages innovation and commerce, and respects health and environmental concerns. ATR urges all members of Congress to support this bipartisan solution.

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TSCA Modernization Act Would Benefit Consumers and the Economy

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Posted by Justin Sykes on Monday, June 1st, 2015, 2:19 PM PERMALINK

This week the House Energy and Commerce Committee will hold a full committee vote on H.R. 2576, the TSCA Modernization Act. This bipartisan Act, sponsored by Representative Shimkus (R-IL) and co-sponsored by Representatives Upton (R-MI), Pallone (D-NJ) and Tonko (D-NY), would offer much needed reforms to chemical regulation in the U.S. that would benefit consumers and the nation’s economy.

The Toxic Substances Control Act (TSCA) was passed in 1976 to regulate the production and use of chemicals in American commerce. However industry innovations in product development and chemical safety have far outpaced the Act’s provisions leaving it outdated and untouched by lawmakers for almost 40 years.

This has led to criticism of TSCA over the years from industry, environmental and consumer groups that all point to inefficiencies in the Act’s chemical evaluation process, as well as a patch work of state regulations that can stymie interstate commerce and increase compliance issues for businesses.

Both of these concerns have far reaching impacts on the economy and consumer confidence, further making the case for reforms. As such, the TSCA Modernization Act or H.R. 2576 would alleviate these longstanding issues surrounding TSCA by offering common sense reforms.

First, H.R. 2576 puts in place measures to improve the chemical review process in order to increase consumer protections. The Act establishes hard and fast deadlines for EPA decisions on risk evaluations and requires such decisions be based on health and environmental considerations as opposed to costs. It also requires full consideration of vulnerable subpopulations and ensures each review is based on the best available science.

Additionally, products that fall within TSCA’s purview often move in and out of interstate commerce, being used as part of manufactured goods or as intermediaries in industrial processes. Due to inefficiencies in TSCA on the federal level, this has led to a patchwork of state laws that has contributed to burdensome compliance issues and uncertainty for businesses.

H.R. 2576 would remedy such compliance issues by providing for a more cohesive national chemical regulatory program that gives businesses and states a new level of certainty with regards to interstate commerce. The Act would also provide for state interests by allowing states to act if the EPA does not.   

The time has come for lawmakers in Congress to act to update and improve the Toxic Substances Control Act. For too long TSCA provisions have gone wanting, however the TSCA Modernization Act (H.R. 2576) now offers a bipartisan solution to reforming this outdated legislation.      


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