Meanwhile, in the States

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Posted by Kate Stolar on Friday, June 24th, 2016, 5:07 PM PERMALINK

Alaska: Gov. Walker may withhold Alaskan resident’s dividend checks if lawmakers don’t resolve the state’s budget problems during second special session that starts July 11.

California: Constituents faced 89 local taxes and bonds on the ballot this primary election and can expect more tax increases on the ballot this November.   

Illinois: The Chicago Teacher’s Union hit City Hall Wednesday to promote numerous tax hikes including a new tax on financial transactions, higher fuel and hotel taxes, and a tax on ride-share services.

Illinois: The state is still without a budget—12 months and counting.  

Kansas: Lawmakers entered special session on Thursday to come up with additional education funding as mandated by the State Supreme Court last month.

Louisiana: Lawmakers end the state’s second special session with nearly $284 million in new taxes.  

North Carolina: Tar Heel State lawmakers may ask voters to lock in place income tax cuts made since Republicans gained full control of the legislature and governor's office in 2013 on the ballot this November.

Pennsylvania: Rumors of a $500 million tobacco tax increase would put Pennsylvania on track for the largest state budget increase in a decade. 

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Court Bucks Obama on Fracking, EPA Embellishes CPP, and More in Energy This Week

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Posted by Bradley Wyatt on Friday, June 24th, 2016, 3:59 PM PERMALINK

This week Americans for Tax Reform has been following a number of issues in the energy policy arena, including a resounding blow to the Obama Administration’s regulatory regime from one of his own appointees, a historic update to the Toxic Substances Control Act, and House plans for Interior-EPA appropriations.

Below are just a few of the energy issues ATR has been following this week. 

Obama Appointee Strikes Down Fracking Rule:  This week a federal judge appointed by President Obama struck down the Bureau of Land Management’s (BLM) 2015 rule for hydraulic fracturing on federal lands. Wyoming District Court Judge Scott Skavdahl, appointed by Obama in 2011, ruled that “Congress has not delegated to the Department of Interior the authority to regulate hydraulic fracturing,” and that the rule exceeds the authority of the BLM.

Judge Skavdahl also took the opportunity to criticize the Administration on executive overreach stating, “Congress’ inability or unwillingness to pass a law desired by the executive branch does not default authority to the executive branch to act independently.”

TSCA Reform Bill Becomes Law: This week the bipartisan Frank R. Lautenberg Chemical Safety for the 21st Century Act, H.R. 2576, was signed into law, marking the first time in four decades the Toxic Substances Control Act (TSCA) has been reformed. The pro growth economic reforms contained in the bill will increase consumer protections and make it easier for American businesses to transverse the interstate marketplace, which had previously suffered from over complication due a to a patchwork of state laws and regulations.  

In a letter last month, President and founder of Americans for Tax Reform Grover Norquist urged lawmakers to act on TSCA reform and highlighted the need for an update of the law. “Since enactment of TSCA in 1976, 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,” Norquist wrote.  While some of the reforms did leave something to be desired, for instance enhancing EPA’s reach. Overall though the reforms will help to create a more cohesive national chemical regulatory program that gives businesses and states a new level of certainty with regards to consumer protections and interstate commerce. 

House Tees Up Interior-EPA Spending Bill: Appropriations Chair Hal Rogers (R-Ky.) this week announced the Interior-EPA spending bill would hit the floor the week of July 4th when lawmakers return from the Holiday recess. The Appropriations Committee approved the spending bill in early June on a 31-18 party line vote.

As part of the bill, the EPA will see it’s budget cut by over $160 million, bringing it down to around $8 billion. The bill reduces the agency’s regulatory programs by six percent, and includes language blocking the Clean Power Plan, methane rule, and Waters of the U.S., among others.

 Study Finds EPA over estimated benefits, underestimated costs of CPP: A new study released by the Manhattan Institute criticized the Environmental Protection Agency (EPA) for their flawed analysis of the Clean Power Plan (CPP). Last August, the EPA released the final version of the CPP, which is projected to kill thousands of jobs, reduce GDP, and increase energy prices. As one would expect, the unelected bureaucrats at the EPA failed to present an accurate cost-benefit analysis of the President’s signature energy legislation. The study points out a number of flaws with the Agency’s analysis of the rule.


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Stephen Heins

The EPA's Clean Power Plan and its Many Flaws

This is a response to an editorial in the recent Wall Street Journal: 'Brushing Back a Lawless EPA'.

While it may be said that calling the EPA "lawless" seems a bit extreme, there are some of us who see many basic flaws in the EPA's Clean Power Plan:

1. Medical computations of indirect health benefits from the reduction of PM 2.5 (or fine particulate matter) have never been well demonstrated;

2. Several studies used to promote the CPP are likely examples of "study-bias;"

3. The CPP places complete faith in the advancement of technology responding to political dictates instead of the marketplace;

4. The CPP lacks a full accounting of the costs of stranding electrical assets and the large investment in new infrastructure, which essentially just replicate old distribution assets;

5. The Clean Power Plan has never been properly vetted, and there never existed any state or national political mandate calling for its formulation;

6. To date, 27 states have officially challenged the legality of the Clean Power Plan;

7. President Obama and Secretary McCarthy are likely to be in the rear view mirror by the time it is fully implemented;

8. The CPP has been sold to the American public by the current administration with an expensive PR effort indistinguishable from a political campaign;

9. Actual greenhouse gas reductions from the Clean Power Plan are miniscule, and as of 2015, according to Scientific America and the Energy Information Administration (EIA), 47 states had already achieved sharp decreases in emission from 2007 levels, with reductions of over 1,000 million tons;

10. The US is already on a glide path whereby America has reduced more greenhouse gases (GHS) than any other country in the world, which even the Sierra Club acknowledges;

11. The Clean Power Plan has relied on faulty cost benefit analysis throughout all versions of the new EPA's regulations;

12. The CPP gives the EPA and state environmental agencies first class status, making all other state and federal agencies (like the Department of Energy and State Utility Regulators) second class citizens, with second class powers;

13. With “cross state” and regional emission differences, the CPP makes states and regions compete against each other in energy markets previously regulated by states, and is de facto helping to create a national emissions market;

14. The CPP is fraught with silo thinking, with no heed paid to the rapidly expanding convergence of energy, technology and telecommunications;

15. In the case of the above convergence, there is no consideration for the growing need for electricity to allow significantly more energy, energy efficiency and economic development in all 50 states;

16. The CPP suffers from a serious lack of transparency, whereby much of the information remains undisclosed. Most of the grant money provided for health and emissions studies is under-declared. The significant input provided by large environmental groups is largely buried in the footnotes. The robust public relations campaign conducted by the EPA and the White House, and a large number of related texts and emails, are shrouded in the lack of proper disclosure;

17. The EPA (and particularly Administrator Gina McCarthy) has used its legal and quasi-legal bully pulpit, afforded it in the media and through the questionable use of Social Media, to sway public opinion for its environmental crusade, much as it has done with the Clean Water Act;

18. Finally, the biggest flaw of all is the fact that, to date, the Clean Power Plan has lacked sufficient soundness to withstand challenges in the Supreme Court of the United States.

Sheriff John Rutherford Signs Written Commitment to Oppose Higher Taxes

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Posted by Alec DiFruscia on Friday, June 24th, 2016, 12:54 PM PERMALINK

Jacksonville Sheriff John Rutherford (R-FL), candidate for Congress in Florida’s 4th  Congressional District, has signed the Taxpayer Protection Pledge to the American people. The Pledge is a written commitment to the citizens of Florida and to the American people to oppose all tax increases. Rutherford is running to replace retiring Congressman Ander Crenshaw.

Rutherford has served as the Jacksonville Sheriff since 2003, and under his tenure, Jacksonville has seen the lowest crime rate in 40 years. Sheriff Rutherford practiced “lean-management” in his department, operating it in a cost-effective fashion. He initiated “community based problem solving,” hired more officers, and the crime rate dropped.

“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. Signing the Pledge is the first step in that process.”

The Taxpayer Protection Pledge has been offered to every candidate for federal office since 1986. In the 114th Congress, 218 Congressmen and 48 Senators have signed the Pledge.

“We are ecstatic about Rutherford’s commitment to the taxpayers of Florida. I challenge all candidates for Florida’s 4th Congressional District to make the same commitment to taxpayers by signing the Taxpayer Protection Pledge today,” continued Norquist.

John Rutherford will run in Florida’s 4th Congressional District Primary on August 30th. 

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ATR Applauds House Republicans’ Tax Blueprint

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Posted by Natalie De Vincenzi, Alexander Hendrie on Friday, June 24th, 2016, 10:19 AM PERMALINK

ATR together with 9 free market organizations today applauded the House Tax Reform Working Group blueprint.

Standing at 74,000 pages, the U.S. tax code is too complex. Americans waste billions of hours and dollars trying to comply with the tax puzzle and the U.S. faces a serious global disadvantage with the nation’s high corporate tax rate. Tax reform is necessary to make American lives easier and to reestablish America’s global competitiveness.

The full letter is here and below.

Dear Speaker Ryan and Chairman Brady,

On behalf of the undersigned organizations, we write to applaud the efforts of the House Tax Reform Working Group. The Blueprint you have released today outlines a thoughtful approach to tax reform that would greatly benefit the individuals, families, and businesses that are hampered by a broken tax code.

Tax reform was last passed three decades ago and our code is woefully uncompetitive, overly complex, and out of date. It urgently needs to be fixed, and the working group’s Blueprint ensures this issue remains center stage. Unfortunately, the current President has proven unwilling to seriously address the issue of our uncompetitive and unfair tax code, instead deriding the pressing need to update it as a “race to the bottom.” Given the urgency of this problem, we believe it is vital that pro-growth tax reform is passed within the first hundred days of the next Congress.

While tax reform touches many issues by necessity, it is crucial that any new code prioritizes competitiveness, simplicity, and growth.

Simplify the Tax Code The tax code is more than 74,000 pages long and Americans spend over 6.1 billion hours complying with it each year, resulting in an annual economic loss of $234.4 billion. The reality is, it is difficult or impossible for American families to properly comply with the tax code. Your Blueprint takes significant, important steps toward simplicity and fairness by consolidating seven individual income tax rates into three, eliminating the alternative minimum tax, and completely killing the death tax, which has destroyed over $1.1 trillion of capital in the U.S. economy. Additionally, it streamlines individual deductions and exclusions and consolidates numerous, overlapping tax benefits for higher education. All of these changes would help reduce the monstrous tax code to a more manageable size and decrease the amount of confusion and frustration that Americans face every year when they file their taxes.

Reducing Rates to Address America’s Competitiveness Problem. Under our current system, American businesses simply cannot compete with the rest of the world. We have business taxes far higher than the rest of the developed world with a statutory corporate rate exceeding 39 percent, more than 14 points higher than the developed average. Other countries are taking advantage of our inaction as they aggressively lower their tax rates to lure American jobs and businesses to their soil. Your Blueprint reduces the corporate tax rate to 20 percent – a change that would act as a powerful economic stimulus by encouraging domestic businesses to grow and foreign businesses to relocate

to the U.S. Further, it would reduce the top rate on pass-through entities, many of which are small businesses, to 25 percent.

Tax reform must encourage economic growth, jobs and innovation. For years, growth has remained stagnant, as new jobs have failed to materialize and wages remain unchanged. Just 38,000 jobs were added in May and labor force participation has continued to drop. Congress can reverse this trend with the type of pro-growth tax reform outlined in your Blueprint. In addition to reducing rates, your plan would provide full expensing for businesses – a change that would incentivize capital investment and lead to significant economic expansion. Additionally, it would transition from a worldwide tax system to a territorial system, thereby aligning our code with much of the industrialized world and, more importantly, allowing companies to reinvest foreign earnings back into our domestic economy. Also, under your plan, the top tax rate on long term capital gains and qualified dividends is cut from 23.8 percent today to 16.5 percent, a powerful pro-growth reform.

We applaud the work of the Tax Reform Working Group and your efforts to keep this important issue at center stage. It has been far too long since Congress last passed tax reform and it is imperative that businesses and families receive relief soon. We understand that there are many details of the plan to be worked out and we look forward to participating in these discussions and working with you to enact pro-growth tax reform in the coming months and years.


Grover Norquist
President, Americans for Tax Reform

Pete Sepp
President, National Taxpayers Union

David Williams
President, Taxpayers Protection Alliance

Neil Bradley
Chief Strategy Officer, Conservative Reform Network

Jim Martin
Chairman, 60 Plus Association

Tom Schatz
President, Council for Citizens Against Government Waste

Karen Kerrigan
President & CEO, Small Business & Entrepreneurship Council

Christine Harbin
Director of Federal Affairs and Strategic Initiatives, Americans for Prosperity

Paul Gessing
President, Rio Grande Foundation 

Andrew Moylan
Executive Director, R Street Institute

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ATR Statement on House GOP Tax Reform Blueprint

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Posted by Alexander Hendrie on Friday, June 24th, 2016, 10:00 AM PERMALINK

The House Republican Conference under the leadership of Speaker Paul Ryan (R-Wis.) and House Ways and Means Chairman Kevin Brady (R-Texas) today released their blueprint to reform the tax code. This pro-growth plan cuts taxes for ALL American families and businesses, simplifies the code, promotes strong economic growth, and allows our businesses to better compete against foreign competitors.

“The Republican blueprint for tax reform is a clear and dramatic path to strong economic growth and job creation,” said Grover Norquist, president of Americans for Tax Reform. “When enacted it will steer America on a sharp U-turn from our present road to serfdom. America cannot limp along on its weak and weakening ‘recovery’ -- with this blueprint the path is clear.”

Norquist continued: “The blueprint is completely consistent with the Taxpayer Protection Pledge a majority of the members of congress have signed promising the American people that they will oppose and vote against any net tax hike.”

For the typical American family, this blueprint will simplify the code so that an annual tax return can be filed on a postcard. For businesses on Main Street, this plan will cut needless bureaucratic red tape and complexity. For iconic American businesses, this blueprint will ensure they can compete, and thrive against foreign competitors. And for the economy, this plan will replace the policies that led to seven years of stagnant growth with a vision that fixes our broken code and promotes opportunity for all.  

Importantly, this proposal takes the code much closer to a system that taxes in the fairest and most efficient way – by taxing once, at the point of consumption. Basic elements of the plan include:

Individual Tax Rates: Consolidates the existing seven tax brackets into three brackets – 12 percent, 25 percent, and 33 percent.

Full Business Expensing: 100 percent immediate, full business expensing, meaning businesses will be allowed to deduct purchases immediately rather than being forced to use the arbitrary and confusing system of depreciation which distorts investment.

Business Tax Rates: Under the current code, American businesses face the highest tax rates in the developed world. This plan ends that by cutting the corporate tax rate from the existing 35 percent rate to just 20 percent. The blueprint also cuts the tax rate on pass-through entities from more than 40 percent to just 25 percent.

International Tax System: Streamlines and overhauls the confusing, complex and uncompetitive international tax system.

- Replaces the worldwide tax system with full territoriality, meaning that American businesses will no longer be subject to double taxation – once when they earn this income overseas and again when this income is brought back to the U.S.

- As part of the shift toward a consumption based system, the blueprint calls for applying businesses taxes on a destination basis. This means that American exports will not be subject to U.S. income tax but products and services sold in the U.S. will be taxed regardless of whether they were produced here, or imported from a foreign country. This ends the competitive disadvantage our exports had when competing with the rest of the world, and that foreign imports had with local competitors.

Death Tax: Repealed

Capital gains and Dividends: Reduces taxes on investment income by creating a 50 percent deduction on a taxpayer’s bracket. This means cap gains/dividends rates of 6 percent, 12.5 percent, and 16.5 percent, far below the existing 23.8 percent. While the plan is silent on section 1031 “like-kind exchanges,” it does call for a tax code that promotes business investment.

Alternative Minimum Tax: Repealed

Individual Credits:  Consolidates five family deductions into two – a larger standard deduction and a child/dependent tax credit. Preserves tax incentives for charitable giving and homeownership and eliminates all other itemized deductions.

Business Credits: Calls for simplifying the code by eliminating the majority of deductions and credits, with the R&D tax credit being one notable exception.

Interest Deduction: Allows businesses to deduct interest expense from any interest income but disallows deductions from net interest expenses. This removes the distortions in the tax code that favor debt over equity toward the ideal consumption base.

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Strong economic growth? Is that what we got with the Bush Tax Cuts, I believe it was called the Great Recession. Cutting taxes without cutting spending leads to DEBT. Even Reagan triple our Debt. No new taxes forever leads to more DEBT. Get real!!!

My political satire, entitled "Taking the Tea Party Republican Tax Pledge", is on YouTube. Here is the link

Conservatives Oppose Big Labor's "Take on Wall Street" Campaign

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Posted by Natalie De Vincenzi, Alexander Hendrie on Thursday, June 23rd, 2016, 2:00 PM PERMALINK

Today, ATR and more than 20 other conservative organizations have voiced opposition to Big Labor’s campaign “Take on Wall Street”.

Big Labor’s campaign is radical and out of touch.  Through tax hikes and increased government involvement, the five-part campaign will restrict the ability of Americans to access important investment and retirement advice to the benefit of big labor interests.

The full letter can be found here and is below:  

As organizations representing taxpayers, Tea Party activists, limited government conservatives, libertarians, and Americans across all 50 states, we write in opposition to the radical agenda proposed by Big Labor's latest campaign, "Take on Wall Street."

This campaign is a thinly-veiled attempt to push a radical liberal agenda on the electorate under the flimsy guise of fighting monied interests on Wall Street. Nothing could be further from the truth – this plan is really about restricting the ability of Americans to access important investment and retirement advice to the benefit of big labor interests.

Their agenda is a five-point recipe for financial ruin. It includes:

Forcing the most disadvantaged to bank with the United States Post Office (USPS). Many low income Americans don’t have access to banking services and decide to borrow from check cashing and payday loan businesses in their communities. Rather than promote time-tested, conventional banking options for the poor, Big Labor is pushing the ridiculous idea that the USPS should take on banking services for low income Americans. They want to have the government shut down private business and instead direct the poor to the local post office for banking needs. They even want them to be able to receive car loans at the post office. One Obamacare is quite enough--we don't need Obamacare for banks, too. If there's one thing most Americans know, it's that the USPS is the last place you'd want to keep your money. Yet that's exactly what Big Labor wants low income Americans.

Raising capital gains taxes. The ultimate goal of the Left is to tax all capital gains as ordinary income. They are content to do this one piece at a time. Their first target is taxing carried interest capital gains at higher rates. This would hurt pension funds, charities, and colleges that depend on these investment partnerships as part of their savings goals. It would also hurt small businesses who would find themselves increasingly shut out from investment money available to them from these partnerships.

Creating a financial transaction tax. Big Labor also wants to create a brand new kind of tax that does not exist today. Sometimes known as a "Tobin tax," a financial transaction tax would put a levy on every single financial transaction done every day. This would even include simple actions like investing in an IRA or saving for a child's college in a 529 plan.

Allowing the government to rip apart banks. "Breaking up the big banks" is a rallying cry of socialist Presidential candidate Bernie Sanders and at Big Labor conventions, but it makes no sense in the real world. A better solution would be ending “Too big to fail” and allow the free market, not big government to decide whether a business is too big or too small. Government's job is to fairly enforce basic laws and generally get out of the way of the market.

Imposing a tax hike "wage control" on CEOs. The government should not be allowed to tell businesses how much they can pay their employees, but that’s exactly what Big Labor wants to do by limiting the tax deductibility of CEO compensation. This was tried in the 1993 Clinton tax hike and resulted in an explosion in stock options, something Big Labor now also laments. The simple fact is it's not the government's job to say how much is too much to pay talent--that's the job of shareholders.

This five-point plan is completely divorced from reality. It is radical, out of touch, and would take our nation in the wrong direction.


Jim Martin
Chairman, 60 Plus Association

Phil Kerpen
President, American Commitment

Grover Norquist
President, Americans for Tax Reform

Kevin Waterman
Chairman, Annapolis Center-Right Coalition

Justin Owen
President and CEO, Beacon Center (Tennessee)

Andrew F. Quinlan
President, Center for Freedom and Prosperity

Matt Patterson
Executive Director, Center for Worker Freedom

Chuck Muth
President, Citizen Outreach (Nevada)

Neil Bradley
Chief Strategy Officer, Conservative Reform Network

Tom Schatz
President, Council for Citizens Against Government Waste

George Landrith
President, Frontiers of Freedom

Sal J. Nuzzo
Vice President of Policy, The James Madison Institute (Florida)

Lisa B. Nelson
CEO, Jeffersonian Project

Brett Healy
President, The John K. MacIver Institute for Public Policy (Wisconsin)

Seton Motley
President, Less Government

Kyle S. Hauptman
Executive Director, Main Street Growth

Dee Hodges
President, Maryland Taxpayers Association (MD)

Pete Sepp
President, National Taxpayers Union

Honorable Jeff Kropf (Ret)
Representative, Oregon U.S. House of Representatives
Executive Director, Oregon Capitol Watch

Paul Gessing
President, Rio Grande Foundation (New Mexico)

David Williams
President, Taxpayers Protection Alliance

Darcie Johnston
Founder, Vermonters for Healthcare Freedom

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Obama's FCC Has a Long History of Regulatory Overreach

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Posted by Daniel Savickas on Thursday, June 23rd, 2016, 9:52 AM PERMALINK

Federal Affairs Manager at Americans for Tax Reform, Katie McAuliffe, recently published an op-ed in The Hill detailing the FCC’s illustrious past of interfering in the lives of everyday Americans. This comes in light of the FCC’s Title II regulations, more commonly known as “Net Neutrality”, being upheld by the DC Circuit Court of Appeals. She elaborates:

“It doesn’t take a genius to see what the FCC is doing.  It is piling up obstacles to private investment in private networks, putting us on a glidepath to a taxpayer-funded and government-owned telecommunications and Internet structure that looks like a cross between a Yugoslavian car factory and a Soviet-era milk distribution scheme.”

The full article can be found here.

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Obama Appointed Judge Strikes Down Federal Fracking Rule

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Posted by Justin Sykes on Wednesday, June 22nd, 2016, 12:53 PM PERMALINK

This week a federal judge appointed by President Obama struck down the Bureau of Land Management’s (BLM) 2015 rule for hydraulic fracturing on federal lands. Wyoming District Court Judge Scott Skavdahl, appointed by Obama in 2011, ruled that “Congress has not delegated to the Department of Interior the authority to regulate hydraulic fracturing” and that the rule exceeds the authority of the BLM.

The rule was published in 2015, and focused new regulations and requirements on well construction and wastewater storage, among other things. One of the most onerous provisions was the requirement that companies would be forced to disclose confidential information related to chemicals used in the fracking process. Such a requirement would have been a massive blow to the protection of company trade secrets and have set a dangerous precedent going forward.      

Judge Skavdahl’s opinion however focused primarily on the lack of jurisdiction and authority, ruling that the Department of Interior has not received the delegated authority from Congress to oversee such far-reaching regulations. He further criticized the Interior’s efforts, arguing BLM was acting outside of its statutory authority and contrary to the rule of law.

Skavdahl also took the opportunity to point out issues of executive overreach. “Congress’ inability or unwillingness to pass a law desired by the executive branch does not default authority to the executive branch to act independently,” Skavdahl argued. 

The District Court’s ruling was an embarrassing and sobering blow to President Obama and his signature effort to regulate fracking on public lands, especially at the hands of one of his own appointees. The ruling also comes on the heels of the recent Supreme Court stay that was issued on the President’s Clean Power Plan. Both rulings stand as reminders that President Obama’s repeated executive overreach is no match for basic logic and the rule of law.

While it is likely Interior will appeal this weeks ruling, given Judge Skavdahl’s clear and simple holding on the Department’s lack of statutory authority, President Obama should not count on this onerous and costly rule ever seeing the light of day.


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Political correctness and leftism is just organized anti white hatred.

When are leftist tropes like diversity or mass immigration or so called
anti racism ever demanded of any nonwhite peoples anywhere?

If diversity is such a strength, why are the oh-so-humane left giving this
“gift” to European populations only, when there are so many non white
populations that "need" it much more?

Die versity is code for W G.

Gov. Wolf Takes Income & Sales Tax Hikes Off the Table, But Push for Regressive Tax Hikes Continue in Pennsylvania

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Posted by Kate Stolar on Tuesday, June 21st, 2016, 5:26 PM PERMALINK

Pennsylvania legislators and Governor Wolf are working to finalize a budget totaling over $31 billion.  With the new fiscal year beginning at the end of next week, a deal must be reached soon in order to avoid another budget impasse. Republican lawmakers who hold majorities in both chambers of the state legislature have made it clear they will not support the income and sales tax increases that were part of Wolf’s budget proposal.  Today, Gov. Wolf conceded that he has given up on his efforts to hike income and sales taxes this year. The debate over whether or not to raise taxes in order to balance the budget now focuses on the pending proposal to hike taxes on tobacco products, electronic cigarettes, and vapor products.

The Commonwealth Foundation recently highlighted the following flaws with balancing the budget on the backs of smokers and vapers:


1. They hit the poor the hardest.  Proponents of higher taxes often describe spending reductions as "balancing the budget on the backs of poor people." Yet, that's exactly what cigarette tax hikes will do.

As professors Kevin Callison and Robert Kaestner make clear in a Cato Journal article, a tax increase will hurt the poor most of all, as a large percentage of their household income is spent on cigarettes:

“From 2010 to 2011, smokers earning less than $30,000 per year spent 14.2 percent of their household income on cigarettes, compared to 4.3 percent for smokers earning between $30,000 and $59,999 and 2 percent for smokers earning more than $60,000.”

When two Cornell University economists studied the effects of this "sin" tax, they discovered an unintended consequence: larger food stamp rolls. This should not come as a surprise. Cigarette taxes are regressive and may very well push those around the poverty line into government programs.


2. Tobacco taxes are an unstable source of revenue. The IFO predicts revenue from the current cigarette tax will fall by 3.6 percent in fiscal year 2017.

New York, which has the highest cigarette taxes in the country, saw revenue drop by $400 million over the past four years. While smoking did decline, it cannot account for the dramatic decrease in revenue. Smokers simply turned to the black market or neighboring states for cigarettes.


3. Higher taxes incentivize smuggling. Under the Republican proposal the state’s tax rate will be higher than four of our six bordering states, spiking cross-border shopping and cigarette smuggling.

According to the Mackinac Center, a 62.4 percent tax hike on cigarettes would spike smuggling rates from zero to 20.3 percent. To put it another way, approximately one of every five cigarettes consumed in the commonwealth would be illicit. Not surprisingly, the overwhelming majority of these cigarettes would come from distant, low-tax states like Virginia or the Carolinas.


Americans for Tax Reform recently sent the following letter to Pennsylvania legislators urging them to reject calls for higher taxes, and reminding them that Pennsylvania’s tax burden is already too high and puts the state at a competitive disadvantage:


June 17, 2016

To: Members of the Pennsylvania Legislature

From: Americans for Tax Reform

Re: Standing strong against calls for higher taxes

Dear Members of the Pennsylvania Legislature,

On behalf of Americans for Tax Reform and our supporters across Pennsylvania, I encourage you reject calls to raise taxes to balance the budget. As you work to finalize a budget in the coming weeks, I ask that you keep Pennsylvania taxpayers in mind, along with the following facts:

  • Pennsylvania is home to the 15th highest tax burden in the nation. Taxpayer in the Commonwealth pay 10.2% of their income to state and local tax collectors on average, which is higher than the national average of 9.9%.


  • Most states have a better business tax climate than Pennsylvania. According to the non-partisan Tax Foundation, 31 states have a better business tax climate than the Keystone State.


  • Pennsylvania has the nation’s 2nd highest corporate income tax. That, coupled with the U.S.’s highest in the world federal corporate tax, handicap the ability of Pennsylvania businesses to compete in the global economy.


  • Pennsylvania taxpayers have been hit with over 20 federal tax increases over the last seven years. The last thing Pennsylvanians need right now, especially in the midst of great economic uncertainty, is have politicians in Harrisburg take more of their hard-earned income through higher state taxes.


In light of these fact, I urge you to reject pressure to vote for higher taxes to balance the budget. The problem is not with Pennsylvanians being taxed to little, it’s state government spending too much. ATR will be following these issues closely and working to educate Pennsylvania voters as to how representatives and senators in Harrisburg vote on these important matters. If you have any questions or if ATR can be of assistance, do not hesitate to contact me or Patrick Gleason, ATR’s director of state affairs, at 202-375-3694.



Grover Norquist


Americans for Tax Reform





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I live in Michigan and switched from smoking a carton a week for $3,000 a year to vaping e liquid I make at home for $30 a year. So lets say the parents in a low income household switch to vaping as I did and eliminate a $6,000 annual expense. The big winners, by far, are the kids.

There should be no interference, by taxes or otherwise, with smokers switching to vaping.

Rep. Sanford Looks to Make Flight-Sharing a Reality

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Posted by Justin Sykes on Tuesday, June 21st, 2016, 1:58 PM PERMALINK

Representative Mark Sanford (R-S.C.) this year has been working to make “flight-sharing” in the U.S. a reality. The concept of flight-sharing would allow pilots to share their travel plans so that passengers looking to fly to the same destination would be able to split the costs of the flight. This free-market, pro-consumer concept would add a new layer of travel accessibility to the already booming sharing-economy marketplace, but is currently stalled by and overreaching FAA.  

The concept of flight-sharing is relatively new, and as mentioned would allow private (as opposed to commercial) pilots to share travel plans online so that passengers traveling to the same destination would be allowed to split the costs of the flight with the pilot. Airline ridesharing startups such as Flytenow have developed technology to allow flight-sharing on an online platform that would pair private pilots with other individuals.  

The potential benefits of flight-sharing to consumers and pilots are huge. There are roughly 28,000 commercial flights daily in the U.S., compared to over 50,000 private flights daily. Commercial airlines currently access 560 U.S. airports while private pilots reach over 19,000 airports throughout the country.  

However, under existing federal regulations, private pilots are prohibited from using the internet to post flight routes and as a result effectively prohibited from splitting the cost in sharing a ride. As characteristic of a slow to adapt federal bureaucracy, pilots are allowed to post shared flights on a “3-by-5 card” pinned to the bulletin board of the pilots lounge, but are barred from posting the same information on a virtual bulletin board.

Thus once again you have federal bureaucrats preemptively grounding a potentially market changing and consumer driven innovation before it has had the chance to take off. Thankfully Rep. Sanford understands the potential benefits that flight-sharing could yield for consumers and the economy.

In response, Rep. Sanford authored an amendment to correct this issue, the language of which was incorporated into the AIRR Act during committee consideration. The language of Sandford’s provision would require the FAA to issue or revise regulations to ensure that holders’ of a private pilot’s license can communicate with the public through any medium, such as the internet. As such, flight-sharing startups like Flytenow would be allowed to operate their internet-based platform pursuant to FAA rules.        

In a recent press release, Rep. Sanford touted the benefits of flight-sharing, stating that, “if private pilots can connect with passengers, the end result is more flights available to more airports – and more choices for me and you as consumers.” 

Lawmakers in Congress are currently facing a July 15 deadline to reauthorize funding for the FAA, with the House and Senate both offering competing plans. Regardless of what route lawmakers take, the legislative vehicle should include the flight-sharing provisions Rep. Sanford has put forth.   

As we’ve seen play out with the hard-fought success of other sharing economy technologies, government is often slow to adapt to the fast paced innovation of the free-market, thus depriving Americans of life changing products and services. Rep. Sanford’s efforts to support flight-sharing would resolve such regulatory quagmires by allowing a new and market changing service to benefit consumers and the economy.


Photo credit:  Gage Skidmore

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