Conservative Groups Unify Around McConnell Strategy to Protect States Against EPA Power Grab

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Posted by Alexander Hendrie, Chris Prandoni on Tuesday, March 31st, 2015, 11:00 PM PERMALINK

Americans for Tax Reform today released a coalition letter signed by 32 nationwide conservative or free-market organizations supporting Sen. Mitch McConnell’s work with states to contest the Environmental Protection Agency’s (EPA) Clean Power Plan (CPP).

Last June the EPA proposed the legally precarious CPP that requires states to reduce carbon emissions but would increase electricity costs for consumers and threaten grid reliability. In a letter sent to every state, Sen. McConnell urged governors to think twice before getting their fingerprints on EPA’s proposal.

Free-market and conservative groups from across the country endorsed Sen. McConnell’s strategy, writing:

"We also agree with you that states are completely within their legal rights to “just say no” and let EPA take sole responsibility for implementing the 111(d) rule. The right of states to keep their fingerprints off what they regard as a misguided or unlawful rule is basic to the very concept of cooperative federalism."

"It is therefore appropriate for Congress, the branch of government charged with keeping the Executive in check, to help states fully understand the obligations and consequences flowing from obscure federal regulations. After all, Congress wrote the laws the EPA is using to justify the CPP."

Grover Norquist, President of Americans for Tax Reform, praised Sen. McConnell’s leadership and criticized EPA’s pressure campaign saying “EPA is asking states to do what the agency knows it cannot legally do: control carbon emissions ‘outside the fence.’” Norquist continued, “Before states submit a State Implementation Plan, governors and legislators would do well to heed Sen. McConnell’s advice and study the impacts of the Clean Power Plan while waiting for the courts to rule on the Clean Power Plan’s legality.”

See the full letter here.

The coalition letter was signed by:


60 Plus Association

American Energy Alliance


Americans for Prosperity

Americans for Tax Reform

Beacon Center of Tennessee 

The Bluegrass Institute

Buckeye institute

Caesar Rodney Institute

The Cardinal Institute for West Virginia

Civitas Institute

Competitive Enterprise Institute

Concerned Women for America

Council for Citizens Against Government Waste

E&E Legal

Freedom Partners Chamber of Commerce

HomeMakers for America

Independence Institute

Independent Women’s Forum

Independent Women’s Voice

I am Created Equal, Colorado

The James Madison Institute

The John K. MacIver Institute for Public Policy

Let Freedom Ring

Maine Heritage Policy Center

Mississippi Center for Public Policy

Montana Policy Institute

National Taxpayers Union

Public Interest Institute

Rhode Island Center for Freedom and Prosperity

Rio Grande Foundation

Taxpayers Protection Alliance


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IRS Looking to Recruit Millennials

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Posted by Alexander Hendrie on Tuesday, March 31st, 2015, 3:24 PM PERMALINK

Good news millennials: The IRS is now hiring! In a speech at the National Press Club today, IRS Commissioner John Koskinen said that the IRS will now be encouraging more millennials to come work at the agency.

As the first generation to be raised entirely in the digital age, millennials are in their element working with all things tech including social media and all types of software applications.

However, tech-savvy millennials may find working for the antiquated IRS somewhat challenging. That’s because many of the programs the IRS uses are more than 50 years old. As Commissioner Koskinen has said:

“In regard to software, we still have applications that were running when John F. Kennedy was President.”

In fact, the IRS still uses a programming language that was considered outdated at the turn of the millennium:

“And we continue to use COBOL programming language. COBOL was considered outdated back when I served as Chairman of the President’s Council on Year 2000 Conversion and it is extremely difficult to find IT experts who are versed in this language.”

While millennials are often derided for being anti-social and glued to their technology, this aversion to real life communication makes them an ideal fit with the IRS. Already, the agency does not answer phone calls at local offices and does not allow elderly or disabled taxpayers to leave phone messages. Taxpayers have also found it difficult and time consuming to get through to a human being this filing season.

Although they may not answer the phone, the IRS is nevertheless working very hard to find “modern” new initiatives in order to increase efficiency. One exciting new idea the IRS is trying — on a limited basis --  allows taxpayers to set up appointments, instead of waiting in line for hours and hours outside their local office. As Koskinen stated in his speech:

“To help cut down on the long lines, one new approach we’re trying is very simple. Why not let people make appointments in advance rather than wait in line for hours. We began doing this at 10 centers in February and recently added 34 more.”

With its groundbreaking modern ideas and technology, millennials will feel right at home working for the IRS.

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New Mexico Closing in On Civil Asset Forfeiture Reform

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Posted by Sven Werner, Jorge Marin on Tuesday, March 31st, 2015, 11:07 AM PERMALINK

On March 30, 2015, Americans for Tax Reform sent a letter to New Mexico Governor Susana Martinez urging her to sign HB 560 into law. The Land of Enchantment is on its way to becoming a role model for reforming the nation’s broken civil asset forfeiture laws. HB 560 would transfer funds obtained through civil asset forfeiture into the state’s general fund and require a criminal conviction in order to confiscate your property.

The bill passed the state legislature unanimously and is waiting to be signed by Gov. Martinez. These changes would bolster the credibility of law enforcement with their local communities, in addition to assuring law-abiding citizens that there is no danger of their property being confiscated. The following is the text of the letter sent to Governor Martinez:


March 30, 2015

Dear Governor Martinez,

I write to you today in strong support of HB 560, a bill passed on March 21 that reforms the state’s civil asset forfeiture laws. The bill would transfer funds obtained through civil asset forfeiture into the state’s general fund. Additionally, under the new rules, a criminal conviction would be required to confiscate property under civil asset forfeiture. It is my view that you would be doing New Mexico a service by signing the bill into law.

Having passed all committees and subcommittees unanimously, HB 560 enjoys strong support from both sides of the isle. These votes from the State legislature show the far-reaching appeal of reform, but it isn’t limited to the Senate and House, in fact, according to Rasmussen, 70% of Americans believe that you should be convicted of a crime in order for the police to seize your property.

We ask that you help put an end to a regime that allows authorities to take and keep property from individuals not charged with a crime. By signing the bill, civil asset forfeiture is changed into criminal asset forfeiture; thereby ensuring that criminals, not law-abiding civilians, pay the price for broken laws.

This new regime takes into account the need to punish law-breakers and the rights of citizens. Simply put, criminals should not enjoy the fruits of their bad behavior, and by requiring proof of wrongdoing we ensure that those who break the law pay up.

Moreover, the proposed reforms serve to bolster the credibility of law enforcement with their local communities. If law-abiding civilians are assured that there is no danger of their property being confiscated, confidence in the rule of law will be strengthened and officers will find it easier to gain the cooperation of their communities.

Reforming civil asset forfeiture is a major issue for voters across the United States. By acting now, New Mexico stands to be in the vanguard of states bent on modernizing police practices. Law enforcement should not have to be seen by the public as opportunistic profiteers, this HB 560 ensures the continued safety of civilians, the prosecution of the guilty, and the rule of law in New Mexico.


Grover G. Norquist                                                    


Americans for Tax Reform                                        



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Obamacare Regulations Creating Confusion for Taxpayers Ahead of Filing Deadline

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Posted by Alexander Hendrie on Tuesday, March 31st, 2015, 9:00 AM PERMALINK

With a little over two weeks until the April 15 filing deadline, experts are predicting this year’s tax season to be one of the most chaotic and uncertain ever. The reason? Several major Obamacare regulations, including the employer mandate and the individual mandate are in effect for the first time.

The US tax code is already one of the most complex in the world. The IRS estimates that complying with the tax code costs Americans 6.6 billion hours per year and new Obamacare mandates will add yet another layer of complexity on top of an already confusing process. This year, many taxpayers will unknowingly owe the federal government more in taxes, or will owe a penalty fee. Others may believe they owe a penalty, but in fact do not.

An estimate provided by the Kaiser Family Foundation predicated that over 95 percent of individuals that receive a subsidy through enrollment on an Obamacare exchange calculated their income incorrectly. As a result, over half of Obamacare subsidy recipients will likely owe the federal government more money.

The reason for this chaos is because Obamacare provided subsidies early in the year based on an estimate of an individual’s income. The law’s authors incorrectly assumed that income levels would remain largely static year to year. Now, taxpayers must navigate through a set of complex regulations in order to figure out if they paid too much, or too little. With tax season approaching, up to 7.5 million households could be left to figure out how to comply with these confusing new regulations.

Despite this confusion, taxpayers shouldn’t expect to get any help from the federal government. Already, an “erroneous glitch” in Obamacare tax forms meant 800,000 tax returns were sent out with incorrect information. Many families that had already filed taxes were, or will be forced to file amended returns.

In fact, calling the IRS is unlikely to help because the agency does not answer phone calls at local offices, and they have even removed the option for taxpayers to leave messages, even if for the elderly or disabled. Calling the national hotline will do little better, because less than half of calls will be answered, and those that are face a wait time of over 30 minutes. 

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MS-01: Quentin Whitwell Makes Written Committment to Oppose Taxation

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Posted by John Beattie McEwan, Adam Radman on Monday, March 30th, 2015, 2:30 PM PERMALINK

Americans for Tax Reform (ATR) congratulates former Jackson City Councilman Quentin Whitwell for signing the Taxpayer Protection Pledge, which is a written commitment to the people of Mississippi to “oppose any and all efforts to increase the marginal income tax rates for individuals and/or businesses and oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates." Whitwell is running in the May 12 special election to fill the seat vacated by the recently deceased Alan Nunnelee in Mississippi’s first congressional district.

Candidates running for office like to say they will not raise taxes, but often turn their backs on the taxpayer once elected. The Pledge requires these candidates to put their rhetoric in writing and provide an additional layer of accountability to the taxpayer.

ATR has offered the Pledge to all candidates for federal office since 1987. Currently, 48 U.S. Senators and 219 members of the U.S. House of Representatives have signed the Pledge. Additionally, fourteen incumbent governors and over 1,000 state legislators have signed the Pledge.

I want to congratulate Whitwell for taking the Taxpayer Protection Pledge. The American people are tired of the tax-and-spend policies coming from Washington and they are looking for solutions that create jobs, cut government spending, and get the economy going again,” said Grover Norquist, president of ATR.

I challenge all candidates for federal office to make the same commitment to taxpayers by signing the Taxpayer Protection Pledge today,” Norquist continued.

ATR will continue to follow this race closely and will provide additional updates as more candidates sign the Pledge.

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IRS Watchdog: Agency Unable to Justify Spending Decisions

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Posted by Alexander Hendrie on Monday, March 30th, 2015, 2:00 PM PERMALINK

IRS Commissioner John Koskinen recently claimed that his current budget will force the agency to send refunds more slowly, perform fewer audits and even shut down for several days over the coming year.  The agency is pleading poverty, but according to the Annual Report to Congress released by the National Taxpayer Advocate, the IRS has failed to prioritize past budget decisions. According to the report:

“The IRS lacks a principled basis for making the difficult resource allocation decisions necessitated by today’s tight budget environment.”

The problem is not that the IRS does not have the information available. To the contrary, as the report explains: 

“While IRS collected some data that it could use to evaluate effectiveness, it did not develop plans to analyze the data or track it in a way that would allow officials to draw causal connections and develop valid conclusions about the effectiveness of its 2014 service changes.”

While the IRS is crying foul about its funding, it has not even attempted to properly ensure that scarce taxpayer funds are allocated effectively. As a result, the report states:

 “the IRS has come under scrutiny by external oversight organizations who have questioned the IRS’s rationale for its budget decisions. They have not been satisfied with the IRS’s response to their inquiries.”

National Treasury Employees Union President Colleen Kelley claims that the agency is “struggling to keep the lights on”, however the IRS has failed to properly prioritize funding even when budgetary pressure did not exist. The agency has failed to produce a single report on tax complexity since 2002, despite federal law requiring one be compiled each year.

When asked by the NTA to explain why this had not happened, the IRS said it would require “about two full time employees working for about a year” to produce the report. The IRS has 82,982 full time employees.

Although the IRS claims it needs more taxpayer dollars, an analysis by Cato Institute economist Dan Mitchell, shows the IRS’s budget has doubled in the past 30 years, even after adjusting for inflation. While its funding has declined since 2010, it remains higher than mid 2000s levels. In fact, as the NTA points out, the IRS’s refusal to compile these reports is actually making their jobs harder:

“While the IRS would need to spend some resources to produce the complexity report, these costs pale in comparison to the costs of complexity. Moreover, if they prompt a reduction in tax complexity, the reports might ultimately help the IRS do its job and reduce the cost of administering the tax code.”

The above cited material can be found on pages 26-30 & 102-108 of Volume One of the National Taxpayer Advocate’s Annual Report to Congress.

The full report may be accessed here.


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Cigarettes: A Case Study in the Slow Rise of Excise Taxes

Posted by Paul Blair on Monday, March 30th, 2015, 1:26 PM PERMALINK

The 18th century English writer Dr. Samuel Johnson defined excise taxes as "A hateful tax levied upon commodities, and adjudged not by the common judges of property, but wretches hired by those to whom excise is paid." In the midst of ongoing debates about tax hikes on tobacco cigarettes, liquor, soda, and vapor products, this seems relevant. 

Over the last two years, a new target for the public health wretches has emerged, replacing the long-standing number one target of sin taxes aimed at extracting money from low-income consumers. Electronic cigarettes and vapor products are disruptive, innovative, technology products that are accomplishing what the public health community never could - they're getting people to quit smoking. Some estimates and national surveys suggest that more than six million people in the United States are daily vapers. This comes at a time when cigarette smoking rates are among the lowest they've been in years. 

In 2014, 15 states considered proposals to tax vapor products like tobacco products with taxes as high as 95 percent. Alternative proposals, like those on the books in North Carolina, subject vapor products to a smaller tax of $.05 per mL of liquid nicotine. A proposal in Arkansas this year would do the same thing. 

A recent history of cigarette tax increases should provide some insight into the future of e-cigarette and vapor product taxes, should more states add excise taxes to the books with regards to the products. As we at ATR have noted before, e-cigarettes should not be taxed like tobacco products. Currently, only Minnesota and North Carolina impose sin taxes on the products - with Minnesota taxing them at 95 percent, up 75 percent from two years ago. 

But what about smaller taxes, less than 75, 95, or 50 percent? A look at cigarette tax hikes since 2000 may shed light on the threat of accepting such proposals. 

The average excise tax on a pack of cigarettes in 1999 was 38.9 cents. Today, the current average excise tax is $1.54 per pack. States have increased tobacco taxes about five times as often as they have raised alcohol taxes between 2000 and 2015, with 111 increases over that time according to the National Association of State Budget Officers

Source: NASBO

Click here for a list of every statewide cigarette tax hike between 2000 and 2015. 

As you can see, the years during and immediately following a recession saw the largest number of cigarette tax increases. In 2003, 19 states increased tobacco taxes; 15 in 2004 and 16 in 2010. 

What does any of this have to do with e-cigarettes and vapor products? Many state legislators have begun to realize that their increasing reliance on tobacco revenue to fund a wide range of programs may have been a bad bet. With declining cigarette revenue, states stand to lose (and are) billions of dollars in tax dollars. One would hope this could be celebrated, as less and less people are smoking but many legislators are clearly more concerned with compensating for this declining and lost revenue. And not in public health. 

E-cigarettes are the new target. Click here to view a map of the tax threats in the states. 

The rise in cigarette excise taxes over the past 15 years should provide a warning to those who think once a tax is on the books in a state, there won't be efforts to raise it slowly over time. Minnesota's tax on e-cigarettes began at 75 percent and is now 95 percent. Some taxes are far more damaging than others. But the fact remains, it is much easier to fend off new taxes than to fight higher taxes. Just ask smokers. 

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Obama Administration Kills Program That Helps Low-Income Families File Taxes

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Posted by Alexander Hendrie on Friday, March 27th, 2015, 3:51 PM PERMALINK

The Obama Administration has quietly ended a tax assistance program that assisted low-income Americans file their taxes, despite Congress fully funding the program. Instead, the administration has given millions of dollars to liberal groups to perform the same role.

According to a report by the Daily Caller, the administration is giving $12 million in federal grants to community service groups through the Volunteer Income Tax Assistance Program in place of the federal program. Unsurprisingly, many of the largest grants issued under this program have gone to groups that have close political ties to the Obama Administration. A recent investigation by the Treasury Inspector General for Tax Administration found that these so-called “volunteer community groups” had a 49 percent failure rate.

The IRS justified the elimination of this program as a “resource management decision.” However, it is clearly a move by the Obama Administration to provide backdoor funding to its liberal allies. As ATR’s Ryan Ellis points out:

“There is a long history of using supposedly neutral government resources to fund the activists and organizers who have all sorts of agendas. It’s not surprising at all that they would be using IRS resources to essentially subsidize some of these organizations.”

According to the National Taxpayer Advocate’s Annual Report to Congress, the administration cancelled the tax assistance program without properly evaluating the impact it would have on low-income Americans.  The tax assistance program had enjoyed longstanding bipartisan support and the program was fully funded by congress despite other parts of the IRS budget facing cutbacks.

This degradation of taxpayer assistance comes at a time when filing taxes is more complex than ever, in part due to several Obamacare provisions coming into effect this year including the employer mandate and the individual mandate. In fact, IRS commissioner John Koskinen raised concerns late last year that the 2015 tax filing season could be delayed, in part due to Obamacare.


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Samuel Clemmons

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Senate Should Reject Tax Hike to Benefit Trial Lawyers

Posted by Ryan Ellis on Thursday, March 26th, 2015, 8:33 PM PERMALINK

This week, the U.S. Senate will vote on an amendment (#587, introduced by Senator Leahy) to the budget resolution. This amendment is a clear payoff to trial lawyers in the form of a brand new tax hike.

The measure would permanently deny employers the ability to deduct punitive damage assessments from lawsuits as a business expense.​

It is not tax reform.  It is a permanent new tax increase.  Taking away this legitimate deduction results in higher taxes.  If it's not canceled out by equal or greater tax relief elsewhere, this income tax increase violates the Taxpayer Protection Pledge.

Businesses can deduct all “ordinary and necessary business expenses” under tax law.  This has always included punitive damage costs.  To deny this well-grounded deduction to employers is arbitrary and clearly intended to benefit a constituency.

Since settlements out of court are still deductible under this tax law change, trial lawyers will be empowered to file junk lawsuits (hoping that employers will choose to settle rather than risk a punitive damage award with no tax benefits). When a lawsuit is settled rather than challenged, the trial lawyer gets a guaranteed win.​

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ATR Opposes Increase in Passenger Facility Charge Fee

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Posted by Alexander Hendrie on Thursday, March 26th, 2015, 3:19 PM PERMALINK

ATR President Grover Norquist today sent a letter to members of Congress urging against an increase in the Passenger Facility Charge (PFC) fee which would raise the cost of air travel for passengers.

The proposed 90 percent fee increase is entirely unnecessary because airports already have ample funding for infrastructure investment and have successfully financed numerous projects over the past few years. As the letter states:  

Since 2008, the 30 largest airports in the nation have spent nearly $70 billion on completed, underway or approved airport capital projects to improve their infrastructure. At the same time, airports have enjoyed a revenue increase of 52% since 2000, far exceeding the consumer price index which rose just 35% in the same time period. Given this period of prosperity, it is puzzling that airports are now pleading poverty and asking passengers to pay more.

Doubling the PFC would result in yet another increase in the cost of air travel for passengers. Already taxes and fees make up 21% of the cost of air travel. As the letter states:

Air passengers are already overburdened by government taxes and fees – taxes make up 21% of the cost of an average domestic flight, and passengers paid $20.5 billion in taxes last year. While airports are requesting a seemingly modest $4 increase in the PFC, this proposal represents a $2.8 billion annual tax increase on air passengers. 

See the full letter here.

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