ATR Opposes Effort to Game Medicaid Matching Fund System in Louisiana
Americans for Tax Reform president Grover Norquist sent the following letter to Louisiana legislators this morning in opposition to legislation that would raise health care provider taxes in order to game the federal Medicaid matching fund system:
Dear Chairman Abramson,
On behalf of Americans for Tax Reform (ATR) and our members across Louisiana, I write today in strong opposition to HB 532, legislation being considered by the committee today that would, if passed, impose a new levy on health care providers for the purpose of gaming the federal Medicaid matching fund system in order to draw down more debt-financed federal dollars.
Lawmakers across the country from both parties, especially during the tight budget years amid and following the recession, have gamed the federal matching fund system to finance other spending priorities or to avoid necessary reforms. HB 532 would continue this budgetary charade, which only serves to increase the rate at which Medicaid goes bust.
Proponents of HB 532 claim it does not raise taxes. It’s just a little game where the state takes a dollar from hospitals, activates a drawdown of a couple federal dollars, gives the dollar back to the hospitals and keeps the remainder for the state, and this game is played a couple hundred million times over. Supporters of HB 532 argue that hospitals are made whole at the end of the day and that this magical free federal money just appears out of nowhere.
There are a couple of problems with this portrayal of HB 532. First, the money drawn down from the feds does not come out of thin air. It comes from the federal income taxes of your constituents. Second, if that weren’t bad enough, HB 532 is ultimately an effort to bleed even more money out of a federal government that is over $16 trillion in debt. How’s that for fiscal responsibility and conservatism? Again, the fiscal chicanery that HB 532 promotes only increases the rate at which Medicaid becomes insolvent and is indefensible.
Rather than push forward with misguided bills like HB 532, which increases state levies on health care providers in order to make the state more dependent on debt-financed federal dollars, ATR encourages legislators in Baton Rouge to lobby Louisiana’s congressional delegation and President Obama for more control of the Medicaid dollars they already take in. As opposed to getting distracted with ill-advised proposals such as HB 532, lawmakers would be wise to instead focus on legislation that would help ensure the state doesn’t fall behind and find itself at a competitive economic disadvantage relative to other states. Such legislation can be found in the ten bills that phase out the state personal and corporate income taxes.
Your counterparts in other state capitals are moving to reduce income taxes on individuals, families, and employers this year. Your neighbors in Texas already enjoy the advantage of having no personal or corporate income taxes; now legislators in Austin are looking to increase their state’s competitive advantage by phasing out the margin tax on businesses this session. Louisiana legislators can ensure their Pelican State remains economically competitive by rejecting the fiscal malfeasance found in bills such as HB 532, and instead focusing on pro-growth reforms that would actually make Louisiana more economically competitive. I urge you to vote “NO” on HB 532. ATR will continue to monitor this issue closely and will educate your constituents as to how their representatives in the legislature vote on this important matter.
To view a PDF copy of the letter, click here.
ATR Urges Louisiana Legislators to Reject Obamacare's Medicaid Expansion
Americans for Tax Reform sent a letter to members of the Louisiana Health and Welfare Committee today, urging them to oppose legislation that would have the state go along with Obamacare's Medicaid expansion, which the U.S. Supreme Court has ruled is a matter in which states have a say. Below is the text of the letter sent by ATR president Grover Norquist to Louisiana legislators:
On behalf of Americans for Tax Reform (ATR) and our members across Louisiana, I write today in strong opposition to the proposals to expand Medicaid spending in the manner proposed and incentivized by the federal legislative monstrosity that is Obamacare. Fortunately, the United States Supreme Court has ruled that the federal government cannot mandate that states expand their Medicaid programs and lawmakers in Baton Rouge have the freedom to choose not to go along with this ill-advised expansion that is sold as a sweet deal for states, but is proven to be a sucker deal upon full examination of the proposal. Simply put, Medicaid in its current form is already growing at an unsustainable rate and the burden that Obamacare’s proposed expansion would place upon the Louisiana economy and your constituents would be crippling.
Even without being duped into Obamacare’s suggested expansion, Medicaid costs are growing at an unsustainable rate with your constituents on the hook for covering the soaring costs. Total federal and state Medicaid spending has ballooned from $70 billion in 1990 to an estimated $400 billion today: a whopping increase of 571 percent.
Medicaid expansion in the Pelican State could wind up costing taxpayers $1.7 billion over the first decade of implementation with costs continuing to increase in the years to follow. In fact, state funds spent on Medicaid have already doubled in the past 15 years. Expanding this program only serves to diminish available funding for other public services such as education, transportation, and public safety.
Another consequence of Obamacare’s Medicaid expansion is that the program itself imposes hidden additional costs that will undoubtedly be passed down to taxpayers. As Michael Cannon, the Director of Health Policy Studies at the non-partisan Cato Institute, states:
“Medicaid discourages work and charitable effort among the taxpayers who fund it, while discouraging self-sufficiency and encouraging dependence among beneficiaries. Medicaid also imposes costs that stem from overuse of medical care, increasing costs for private payers, and giving patients poorer quality care than they could obtain with private coverage.”
Your counterparts in other state capitals, such as your neighbors in Texas, are wisely moving to block Obamacare’s suggested Medicaid expansion and other detrimental provisions of the bill, which includes 20 new or higher taxes on your constituents. These lawmakers are commendably doing all they can to prevent or mitigate the economic and financial havoc wrought by this law. Louisiana legislators would be wise to do likewise.
This committee today can ensure the Pelican State remains as economically competitive as possible by rejecting the Obamacare Medicaid expansion. ATR will continue to monitor this issue closely and will educate your constituents as to how their representatives vote on this important matter.
To view a PDF copy of the letter, click here.
Gov. Perry Moves to Make Texas More Tax Friendly
Americans for Tax Reform sent a letter to Texas legislators today, urging them to support the $1.6 billion tax cut for Texas employers proposed by Gov. Rick Perry yesterday. The proposal outlined by Perry would provide relief to over 100,000 Lone Star State businesses.
Perry’s proposal, if adopted by the legislature, would ensure that Texas remains the economic envy of the nation. Gov. Perry’s plan calls for lowering the franchise tax rate by 5%, making moving expenses deductible for companies that relocate their business to Texas, and expanding the $1 million business tax deduction to companies with gross receipts up to $20 million. In his letter to Texas legislators, ATR president Grover Norquist stated the following:
“While Texas has outperformed others state economically due to its low-tax, pro-growth, free-enterprise approach to governance, other states are moving to catch up in Texas and more must be done this session to ensure that Texas remains the most conducive state for job creation and the most attractive location for companies seeking to escape high tax states. The tax reform proposed by Gov. Perry yesterday would ensure that Texas remains the economic envy of the nation for years to come. “
If Perry’s proposal or the margin tax elimination bills introduced by Sens. Paxton, Patrick, and Estes were to be passed into law before the legislature adjourns next month, Texas would significantly increase the comparative economic advantage it has over other states.
Meanwhile, in neighboring Louisiana, Gov. Bobby Jindal has put forth a pro-growth plan to eliminate the state’s income tax in order to make the state more economically competitive with other states and especially the neighboring state on its western border. There are currently ten bills pending in the Louisiana legislature that would repeal the personal or corporate income tax. Unfortunately, it looks as though the effort to repeal the Louisiana income tax has been sidelined by short-sighted legislators in the Louisiana House.
Louisiana legislators who want to table income tax relief are causing their state to be left behind. Texas already has a significant advantage over the Pelican State due to its lack of a personal and corporate income tax. If Texas legislators are successful in reducing the state’s franchise tax and lawmakers in Baton Rouge continue to twiddle their thumbs, the Lone Star State will only extend its advantage over Louisiana.
Gov. Perry is putting up billboards in Illinois to encourage companies there to consider moving to Texas. If Louisiana lawmakers continue to sit back while other states make their tax climates more hospitable, Perry might want to consider putting up some billboards along the stretch of I-10 running through Louisiana. ATR will continue to follow both issues closely, and will be educating taxpayers in Texas and Louisiana as to how their representatives in Austin and Baton Rouge vote on the important tax relief plans put forth by Govs. Perry & Jindal.
For a copy of the letter that ATR sent to TX legislators today, click here.
ATR Supports 'Pint Bill' in the SC Senate
Grover Norquist, President of Americans for Tax Reform, sent a letter to all members of the South Carolina State Senate in support of SB 423, which would lift archaic restrictions on small breweries, and give them the freedom to sell up to 64 ounces of beer to consumers on site. This is commonsense, pro-growth legislation that would grow the economy and raise additional revenue for government without raising taxes on hard-working citizens. The ‘pint bill’ recently passed the House of Representatives, and its companion bill will be taken up in the Senate in the coming weeks. Mr. Norquist stated the following in his letter:
“Although Prohibition was repealed over 75 years ago, South Carolina still has the dubious distinction of being among the handful of states that still prohibit the sale of pints on-site at breweries. This ill-advised ban reduces economic liberty and causes the state to needlessly forgo a large amount of revenue. Eliminating this prohibition would grow government coffers in the most preferable way possible: through economic growth and an expansion of commerce, not higher taxes. It would also lead to economic growth for small businesses and encourage others to start their own breweries.”
To read a full copy of the letter, click here.
A Tale of Two Governors
While the 2012 election is still fresh in the memory of many, career politician like Martin O’Malley are already laying the framework for higher office by traveling to early primary states such as South Carolina. Given this fact, it is of increasing importance to compare O’Malley’s record to that of his counterpart in the Palmetto State, Nikki Haley. A close examination of the facts shows just how out of touch O’Malley is with the priorities of South Carolinians.
Tax Relief/Tax Reform:
Governor Haley has signed millions of dollars of tax relief into law, helping to make South Carolina a more business-friendly climate. In addition, Governor Haley has also aggressively pursued tax reform on numerous instances. Most recently, as ATR noted, Haley used her State of the State address to call for eliminating the state’s top income tax bracket. Haley has also said that she would like to see the state’s corporate and individual income taxes phased out and eventually eliminated.
Her liberal counterpart, Martin O’Malley, has had quite the opposite record when it comes to fiscal issues. He has consistently straddled taxpayers in the Old Line state with higher bills and fees. In fact, in an exhaustive examination, ATR found that O’Malley raised taxes and fees a whopping 19 times, accounting for $2.2 billion dollars! O’Malley has raised taxes on everything from alcohol to smokeless tobacco to the infamous “millionaires tax”, which seems to have caused a mass exodus of the state’s most successful individuals. But the tax and spend liberal is not done yet. He most recently proposed an $830 million dollar gas tax hike ($3.4 billion over 5 years).
Pension Reform/State Employees:
Gov. Haley has been a stalwart when it comes to saving taxpayer dollars. Recently, she created a stir among state bureaucrats when she asked them to contribute a small amount more for their taxpayer-funded benefits. Furthermore, in the previous legislative session, the Governor signed a sweeping pension reform bill into law which, according to Moody’s Investor Service, would reduce the state’s long term unfunded pension liability by over $2 billion dollars.
On the other hand, O’Malley has presided over a system in Maryland which veers the state in the direction of a fiscal train wreck. According to a report by the Pew Center on the States, Maryland’s unfunded pension liability has increased from $11 billion to around $19 billion in the past few years, rendering any previous attempts at pension reform obsolete. The fund’s assets will cover only 65% of its obligations. In spite of this, O’Malley has presided over a retirement fund that pays exuberant fees to Wall Street investors (with questionable return) at the expense of hard-working taxpayers.
Given the facts above, one can see that the differences between the Governors are more than just regional. Gov. Haley has consistently put the taxpayers first, whereas O’Malley has consistently viewed their interest as his lowest priority, using their hard earned dollars to fund higher and higher spending.
Oppose Gov. O'Malley's Gas Tax Hike
News out of Annapolis took a tone that is all too familiar to taxpayers in the Old Line State. Gov. Martin O’Malley wants to raise taxes yet again! This would be his 20th time doing so, as ATR has previously noted – increasing even more his $2.2 billion in past tax increases. The Governor laid out a proposal that would represent a $3.4 billion dollar tax increase on motorists in the state over the next five years.
The plan calls for gradually raising the gas tax in order to fund infrastructure projects throughout the state. With gas prices soaring due to Barack Obama’s decidedly anti-energy policies, this is something that citizens can ill afford. In addition, Maryland has one of the highest costs of living of any state in the nation, and is facing its highest poverty level in 20 years. Residents cannot afford another one of Gov. O’Malley’s taxes to pay for more government spending.
If Governor O’Malley wants to make infrastructure a priority, he should find the funds for it in the current budget, instead of again raising taxes in an already fragile economy. Infrastructure problems may exist, but they were not created by legislators not having enough money. Rather, they were created by legislators frivolously spending the revenues that they did have. According to an editorial by the Maryland Public Policy Institute, legislators raided over $1 billion dollars from the Transportation Trust Fund to fill budget gaps in other areas. Furthermore, the damaging effects of O’Malley’s previous tax hikes have already been felt in Maryland, with a mass exodus of successful individuals fleeing the state in response to Gov. O’Malley’s “millionaire’s tax”.
If you live in Maryland, click here to contact your legislators and tell them to oppose Gov. O’Malley’s gas tax hike.
ATR Calls on Minnesota Legislators to Reject Gov. Dayton's Tax Hikes
Americans for Tax Reform (ATR) President Grover Norquist issued a statement today calling on Minnesota Democrats to back down from their multiple tax hike proposals. After Minnesota Management and Budget Commissioner Jim Schowalter released a new budget forecast that saw revenue up and the deficit down, the doomsday calls for higher taxes are no longer justified.
Schowalter now projects a budget deficit of $627 million for fiscal years 2014-15, down from the previous projection of $1.1 billion. The current fiscal year will actually end with a surplus of $295 million. Because Gov. Mark Dayton had used the $1.1 billion shortfall as a justification for income, sales, and tobacco tax hikes, Norquist argued that lawmakers should deal with this more manageable deficit in a way that allows it to be wiped out by economic growth and less government spending, rather than delaying Minnesota’s recovery with higher taxes.
“Minnesota is already on the path to a balanced budget without harmful tax hikes,” Norquist said. “Today’s revelation that the budget hole has fallen by almost half takes away the tax-and-spend crowd’s argument that tax increases are necessary. In fact, by raising taxes on Minnesota families and small businesses, politicians are in danger of reversing the tide of economic growth and positioning the state for larger deficits down the road.
“Gov. Dayton’s tax increases – nearly $3.5 billion worth – dwarf the budget deficit. The governor’s true goal is increasing the size of government on the backs of taxpayers. An income tax rate of 9.85 percent is fiercely uncompetitive and will cause small businesses to leave the state for greener pastures. A larger sales tax burden will hit struggling families hard. And a tobacco tax increase will only push commerce across state lines, hurting retailers and government coffers simultaneously.
“Minnesota lawmakers can and should manage this smaller budget deficit without tax hikes. To do otherwise would hamper the fragile progress that is already underway.”
ATR Applauds Governor Nikki Haley's Proposal for Tax Reform
The rate lowering and eliminating tax reform sweeping states across the nation has not gone unnoticed by South Carolina Gov. Nikki Haley, who said the following in her “State of the State” address last week:
“Other states have seen the successes we've had in South Carolina and are nipping at our heels. Look around the nation and see all the governors, the legislators, the states that are proposing slashing or even eliminating their income taxes. We have to keep up. “
Haley then went on to unveil her plan for keeping the Palmetto State’s tax climate competitive:
“This year, I propose that we eliminate the six percent tax bracket.
This reform cuts taxes for the overwhelming majority of people who pay income tax, and not a single South Carolinian will pay more.”
South Carolina’s 7% rate is currently the 13th highest top rate in the country, a distinction lawmakers in Columbia would do well to rid themselves of. More importantly, Gov. Haley’s proposal will provide much needed tax relief to individuals, families, and the more than 300,000 South Carolina small businesses that file under the individual income tax system. The Governor is correct that lawmakers must act this session to keep South Carolina competitive with her neighbors in the Southern region. In Louisiana, Gov. Jindal has already outlined a bold proposal to eliminate the state’s personal and corporate income taxes. Also, in North Carolina, Gov. Pat McCrory has indicated that he will be pursuing some form of income tax reduction, likely on both the personal and corporate side.
ATR supports Gov. Haley’s proposal as a way to keep the state economically competitive and provide relief to the individuals, families, and employers across South Carolina who need relief now more than ever in light of the job-killing, budget-busting Obamacare tax hikes that took effect just four weeks ago.
ATR Signs Coalition Letter Urging Passage of "Immigration Innovation Act of 2013"
Grover Norquist, President of Americans for Tax Reform, joined a coalition of organizations such as the US Chamber of Commerce and the American Conservative Union in sending a letter to Senators Reid and McConnell urging them to support the "Immigration Innovation Act of 2013". The letter read as follows:
Dear Leaders Reid and McConnell,
We write to urge your colleagues to support the Immigration Innovation Act of 2013. America's immigration system is in need of reform, especially with respect to highly-skilled foreign workers. The Immigration Innovation Act will keep American businesses competitive by giving them access to high-skilled labor for jobs they are unable to fill with native-born workers. And it will jumpstart the domestic high-skilled labor supply by investing in American science, technology, engineering, and math (STEM) education.
This bill would increase the cap on H-1B visas for highly-skilled workers from 65,000 to 115,000, and allow that cap to adjust up or down based on the labor demands of the economy. It would also uncap the H-1B exemption for those with advanced U.S. degrees. And it would expand access to green cards for people with advanced STEM degrees, dependents of those with employment based visas, and outstanding professors and researchers.
Allowing more high-skilled immigration is one of the most important steps we can take to improve America's economy and maintain its global competitiveness. As nations like China and India are growing at breakneck speed, it is imperative that the American economy be allowed to innovate and grow. High-skilled immigrants play an integral role in that growth; Immigrants are 30 percent more likely to start a new business than native-born Americans, and newly formed businesses are responsible for the vast majority of new jobs created.
When America turns away a potential investor, entrepreneur, or job creator, that person does not simply cease to exist. She returns to her own country and starts a business that competes directly with American companies. And she hires citizens of her own country instead of Americans.
There are currently over 80,000 technology jobs in the U.S. that are available to Americans but remain unfilled. In the long run, it is important to emphasize domestic STEM education to better prepare Americans for the jobs of the future. But in the meantime, welcoming more highly-skilled workers to our shores makes perfect sense. We urge your support of the Immigration Innovation Act of 2013.
Grover Norquist, President, Americans for Tax Reform
Al Cardenas, Chairman, American Conservative Union
R. Bruce Josten, Executive Vice President of Government Affairs, US Chamber of Commerce
David Bier, Immigration Policy Analyst, Competitive Enterprise Institute
Brian Burch, President, Catholic Vote
Chuck Muth, President, Citizen Outreach
Mario H. Lopez, President, Hispanic Leadership Fund
Alfonso Aguilar, Executive Director, Latino Partnership for Conservative Principles
Rick Watson, Chairman, Florida Center-Right Coalition
Andrew Moylan, Senior Fellow, R Street Institute
To view a PDF copy of the letter, click here.
Phil Mickelson Hits the Rough in Tax-Happy California
How would you feel if your taxes went up by $5 million over night?
Well that’s what happened to pro golfer Phil Mickelson, who recently made headlines for commenting on the absurdly high tax rate he faces as a successful citizen living in California. Mickelson stated: “If you add up all the federal and you look at the disability and the unemployment and the Social Security and the state, my tax rate is 62, 63 percent, so I've got to make some decisions on what I'm going to do.''
Mickelson has earned over $60 million per year roughly for the last few years – not too shabby. As a result of Gov. Jerry Brown’s recent Prop. 30 income tax hike, Mickelson’s state income tax burden jumped from $6.18 million to $7.98 million- a whopping $1.8 million increase!
The Golden State’s income tax hike only added insult to injury for Mickelson this year, who also got hit with a $3.28 million federal income tax hike as a result of the post-fiscal cliff top federal tax rate jumping to 39.6% (plus pay roll tax increase=42%).
Just focusing on Phil’s income tax bite, assuming he continues to earn $60 million per year and stays in California, here is how his tax bill will grow in the post-fiscal cliff, post-Prop. 30 world:
Federal Tax Burden:
Pre Fiscal Cliff Federal Tax Burden (36%)
Post-Fiscal Cliff Federal Tax Burden (42%)
State Tax Burden:
California State Burden Pre-Prop 30 Tax Hike (10.3%)
California State Burden Post-Prop 30 Tax Hike (13.3%)
The majority of players on the PGA tour live in either Florida or Texas, two states that do not have an income tax. State taxes matter a great deal. Neighboring Nevada has no income tax and I’m sure it’s not lost on Mickelson that he can save over $7 million per year by simply moving to the other side of Lake Tahoe.