Patrick Gleason

Golden State Fact of the Day: Severance Tax on Oil Will Further Depress the California Economy


Posted by Patrick Gleason on Wednesday, June 24th, 2009, 10:45 AM PERMALINK


 A severance tax on every barrel of oil produced in California was floated earlier this year and has returned as a topic of debate in Sacramento once again as the state seeks to rectify a $24 billion plus deficit.  In fact, a severance tax is among the cadre of tax hikes that the California Senate and Assembly will vote on today. While today's vote is merely a drill since it will not garner the 2/3rds majority required to pass a tax increase in California, it does present a good opportunity to discuss why a severance tax is bad policy and the myriad of reasons why Golden State lawmakers should reject any severance tax proposal:

·    A severance tax will cause Golden State residents to face higher utility bills and gas prices and, even worse, a higher cost of living in general. Make no mistake, the burden of a severance tax hike would be borne by all California residents and reduce jobs. An additional tax on in-state oil production would adversely affect workers and retirees, most of whom have a stake in energy companies through a 401K, mutual fund, or other investment vehicle.
 
·    California’s fiscal challenges are due, in large part, to reliance on volatile and unpredictable revenue sources such as high income earners. A severance tax will only exacerbate this problem. It is no secret that the price of oil is incredibly volatile; varying up to 30% a year. Imposition of a severance tax will only increase state revenue instability.   
 
·    Oil production is already taxed more heavily in California than nearly anywhere else. Energy companies operating in California already pay some of the highest corporate, property, and sales tax rates in the nation. Tacking on a draconian severance tax will only make the state a less attractive place for energy companies to locate, invest, and create jobs.
 
·    Imposing an additional state tax on oil production will serve as a disincentive on in-state oil production and increase the Golden State’s reliance on foreign imports. Studies show that imposition of a 9.9% severance tax will decrease in-state oil production by an upwards of over 2.4 million barrels over the next 30 years. It should come as no surprise that this decreased output would be accompanied by the loss of approximately 10,000 high paying jobs.
 
·    Rather than place a disincentive on in-state energy production. California lawmakers should instead utilize the state’s untapped petroleum reserves. Such action would simultaneously help address the current deficit without socking it to taxpayers yet again and create high paying jobs in the process.
 
·    There are at least 9 billion barrels of oil off California's coast. At least 1 billion barrels are located in waters that are solely controlled by the state. The natural resources found in state controlled waters alone could immediately generate $5 billion for the state through securitization. What’s more, these reserves can be tapped in an environmentally sensitive way with slant drilling, which requires no new rigs.
 
·    Californians worked 204 days last year, well over half the year, just paying for the cost of their government. If new and higher taxes were the answer then California would be in great fiscal shape, but that is not the case.
 
ATR urges California officials to reject the severance tax and chart a different course of action. California lawmakers need to promote, not put a disincentive on, utilization of the state’s abundant resources. Such an approach will generate much needed revenue for the state and create jobs in the process.

 

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Budget Showdown Continues in Arizona - ATR Urges Taxpayers to Take Action


Posted by Patrick Gleason on Monday, June 22nd, 2009, 5:57 PM PERMALINK



With 8 days left until the budget deadline, Arizona legislators and Governor Jan Brewer remain at odds over how to address the state's $3 billion plus budget deficit, more accurately referred to as a $3 billion plus overspending problem.

Americans for Tax Reform supports the tax hike-free budget passed by the House and Senate but the Governor has promised a veto since the legislature's budget does not include the $3 billion, 17.8% sales tax increase that she has been requesting for the passed several months.
 
Senate President Burns and Speaker Adams have decided to not transmit the budget to the Governor's until negotiations with her and her staff have exhausted all options. One option that has been rumored is a deal in which the Governor will sign the legislature's budget in exchange for legislative referral of her sales tax hike to the ballot.
 
ATR recently sent a letter to Arizona Taxpayer Protection Pledge signers to inform them that referring Brewer's tax increase to the ballot would not be an acceptable "compromise" for Grand Canyon State Taxpayers and would represent a violation of the Pledge that they made to constituents to "oppose any and all efforts to raise taxes."
 
To view a copy of the letter that ATR sent to all Pledge signers, Click Here.
 
ATR encourages Arizona taxpayers to contact their representatives and encourage that they hold the line and remain steadfast in opposition to Brewer's push for a multi-billion dollar tax hike in the middle of a recession.
 
Arizona taxpayers can contact their elected representatives by clicking here.

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Arizona Budget Showdown Continues - ATR Urges Taxpayers to Take Action


Posted by Patrick Gleason on Monday, June 22nd, 2009, 5:43 PM PERMALINK


With 8 days left until the budget deadline, Arizona legislators and Governor Jan Brewer remain at odds over how to address the state's $3 billion plus budget deficit, more accurately referred to as a $3 billion plus overspending problem.
 
Americans for Tax Reform supports the tax hike-free budget passed by the House and Senate but the Governor has promised a veto since the legislature's budget does not include the $3 billion, 17.8% sales tax increase that she has been requesting for the passed several months.
 
Senate President Burns and Speaker Adams have decided to not transmit the budget to the Governor's until negotiations with her and her staff have exhausted all options. One option that has been rumored is a deal in which the Governor will sign the legislature's budget in exchange for legislative referral of her sales tax hike to the ballot.
ATR recently sent a letter to Arizona Taxpayer Protection Pledge signers to inform them that referring Brewer's tax increase to the ballot would not be an acceptable "compromise" for Grand Canyon State Taxpayers and would represent a violation of the Pledge that they made to constituents to "oppose any and all efforts to raise taxes."
 
To view a copy of the letter that ATR sent to all Pledge signers, Click Here.
 
ATR encourages Arizona taxpayers to contact their representatives and encourage that they hold the line and remain steadfast in opposition to Brewer's push for a multi-billion dollar tax hike in the middle of a recession.
 
Arizona taxpayers can contact their elected representatives by clicking here.

 

 

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Arizona Budget Showdown Continues - ATR Urges Taxpayers to Take Action


Posted by Patrick Gleason on Monday, June 22nd, 2009, 5:43 PM PERMALINK


With 8 days left until the budget deadline, Arizona legislators and Governor Jan Brewer remain at odds over how to address the state's $3 billion plus budget deficit, more accurately referred to as a $3 billion plus overspending problem.
 
Americans for Tax Reform supports the tax hike-free budget passed by the House and Senate but the Governor has promised a veto since the legislature's budget does not include the $3 billion, 17.8% sales tax increase that she has been requesting for the passed several months.
 
Senate President Burns and Speaker Adams have decided to not transmit the budget to the Governor's until negotiations with her and her staff have exhausted all options. One option that has been rumored is a deal in which the Governor will sign the legislature's budget in exchange for legislative referral of her sales tax hike to the ballot.
ATR recently sent a letter to Arizona Taxpayer Protection Pledge signers to inform them that referring Brewer's tax increase to the ballot would not be an acceptable "compromise" for Grand Canyon State Taxpayers and would represent a violation of the Pledge that they made to constituents to "oppose any and all efforts to raise taxes."
 
To view a copy of the letter that ATR sent to all Pledge signers, Click Here.
 
ATR encourages Arizona taxpayers to contact their representatives and encourage that they hold the line and remain steadfast in opposition to Brewer's push for a multi-billion dollar tax hike in the middle of a recession.
 
Arizona taxpayers can contact their elected representatives by clicking here.

 

 

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Internet Access Tax Dies in the Louisiana Senate Commerce Committee


Posted by Patrick Gleason on Wednesday, June 17th, 2009, 10:04 PM PERMALINK


The following was cross-posted on www.stopetaxes.com.

What a difference almost two weeks makes. 13 days ago HB 569, legislation that would have resulted in the nation's first internet access tax, quietly saled through the House by a vote of 82-9. Since that vote ATR and other allies worked hard to educate senators, the public, and the media about the misguided nature and adverse consequence of this legislation.

After a lengthy and spirited debate in today's Louisiana Senate Commerce Committee hearing, HB 569 was deferred by a 5-0 vote, essentially killing the bill in the legislative session's waning days.

This development represents a huge victory for Pelican State taxpayers. Not only were Louisianans spared the threat of the nation's first internet access tax, they avoided further squandering of their taxpayer dollars on what would have been an inevitable legal challenge.  As ATR has repeatedly pointed out throughout this debate, HB 569 ran afoul of the federal Internet Tax Freedom Act, which was reauthorized by Congress in 2007.

With this coming on the heels of this week's defeat a tobacco tax hike in the house, 2009 can be considered, overall, a fairly successful session for Louisiana taxpayers.

 

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Louisiana Senate Commerce Commitee Considers Internet Tax


Posted by Patrick Gleason on Wednesday, June 17th, 2009, 6:12 AM PERMALINK


The following is cross-posted on www.stopetaxes.com

The Louisiana Senate Commerce Committee will hold a hearing this morning on House Bill 569, legislation that would impose a new tax on internet access.

The internet has been an invaluable driver of economic growth and job creation, making a tax on internet access particularly onerous. Furthermore, it is preempted by federal law.

In testimony to the commerce committee and in a letter to the entire Senate, ATR noted that perhaps most troubling is the fact that HB 569 represents an attempt to circumvent federal law. The Internet Tax Freedom Act, passed by Congress in 1998 and reauthorized in 2007, prevents states from enacting taxes on internet access.  Calling this tax hike a “fee” in an attempt to bypass federal law is misleading and would invite significant and costly legal challenge for Louisiana if adopted. The contracting economy has presented many budgetary challenges for the Pelican State. In such an environment, it would be foolish to pass legislation that would inevitably require the state to expend taxpayer funds to not only defend the case, but pay the plaintiffs attorneys’ fees if the law is struck down.

ATR staff will be on hand at the hearing today. Stay tuned to this website for further updates. For more frequent updates from the hearing, follow ATR's state affairs manager, Patrick Gleason, on twitter: @patrickmgleason

Below is the full letter that ATR sent to the Louisiana Senate.

 
 
Dear Chairman Duplessis and Members of the Commerce Committee,
 
On behalf of Americans for Tax Reform (ATR), I am contacting you today to express strong opposition House Bill 569, legislation that would impose a new tax on internet access.
 
The monthly 15 cent tax that this bill, if passed, would levy on internet access is ostensibly for the purpose of investigating and prosecuting internet crimes. While this is a laudable goal, there are many ways to fund such an effort without resorting to a $2.4 million tax increase in the middle of a recession.
 
Perhaps even more troubling is the fact that HB 569 represents an attempt to circumvent federal law. The Internet Tax Freedom Act, passed by Congress in 1998 and reauthorized in 2007, prevents states from enacting taxes on internet access.  Calling this tax hike a “fee” in an attempt to bypass federal law is misleading and would invite significant and costly legal challenge for Louisiana if adopted. The contracting economy has presented many budgetary challenges for the Pelican State. In such an environment, it would be foolish to pass legislation that would likely require the state to expend taxpayer funds to not only defend the case, but pay the plaintiffs attorneys’ fees if the law is struck down.
 
While all tax increases should be avoided, especially in an economic downturn, a new tax on internet access would be particularly onerous. The internet has been an invaluable driver of economic growth and job creation. As such, any level of tax placed on access to the internet would have an economically deleterious effect.
 
Furthermore, this tax would set a horrible precedent. There is an endless limit to noble causes politicians may claim necessitate a new tax. Pelican State residents already work 187 days out of the year paying for the cost of government services and regulation. If something is a priority, make it one by funding it with current revenues. Claiming that a new tax is needed is an admission that the cause to be funded by that tax is the lowest priority on the totem poll.
 
The Internet has survived and thrived because the government has thus far been forced to keep its hands off of it. It is the last, best example of a truly free market left in this country and this bill before the committee today would be a step in the wrong direction for the Louisiana economy and online community.
 
As you continue to weigh options to address spending priorities, I urge you to stand up for Louisiana taxpayers and oppose all tax increases. If you have any questions, please contact ATR’s State Affairs Manager, Patrick Gleason at pgleason@atr.org.
 
Sincerely,
Grover G. Norquist
 
CC: Governor Bobby Jindal

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31 Flavors of New Tax Proposals for California


Posted by Patrick Gleason, Kimberly Moogalian on Thursday, June 11th, 2009, 5:12 PM PERMALINK


In last month’s special election, California voters sent a clear message that the taxpayer well has run dry and lawmakers need to address the GoldenState’s overspending problem.

That message apparently did not get through to the union thugs that control California DemocratsDespite already being one of the highest tax states in the country, AFSCME is proposing more new taxes, thirty-one new taxes to be specific.  They claim they have found a whopping $44 billion in “missed revenue.”  Note: missed revenue, translated from liberal speak, means higher taxes. 

In response to this, Assemblyman Chuck Devore (R-Irvine), chairman of the Taxpayer Protection Caucus, has launched a great website in opposition to these tax increases.  DeVore’s website, 31 Flavors of New Taxes for California,” highlights AFSCME’s tax hike wish list, which touches on everything from alcohol, to sales, to gas, and even online commerce

Only 5 other states have a higher state and local tax burden than CaliforniaAnd until last month, California’s income tax was the highest in the nation. Now they have the second highest. This is not how you attract employers, jobs, people, and investment.

Point of fact, California needs to get its fiscal house in order by cutting duplicative programs and wasteful spending. This is no secret. California lawmakers have increased spending by 300% since 1991.  Had spending been limited to population growth and inflation since that time, the state would have a $15 billion surplus rather than facing a more than $24 billion deficit.  California does not have a $24.3 billion deficit. It has a $24.3 billion overspending problem.

If high taxes were the answer, states like California would be in great shape and have balanced budget. Instead, California is perhaps the biggest fiscal train wreck in the U.S. ATR encourages Californians to visit the website and sign DeVore’s petition opposing the proposed tax hikes.

photo credit: aquarian librarian

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A Tobacco Tax Approved by Committee, a Pledge Broken


Posted by Patrick Gleason on Monday, June 8th, 2009, 6:07 PM PERMALINK


Earlier today, the Louisiana House Ways & Means Committee by 8-7 passed HB 889 which will result in a sharp tax increase for consumers of tobacco products. HB 889 would cause Pelican State tobacco consumers to see taxes to rise 50 percent on cigars, 50 percent on smokeless tobacco, and the price of a pack of cigarettes rise by 50 cents per pack – a 138 percent tax increase.
 
Americans for Tax Reform, a non-profit taxpayer advocacy organization that opposes all tax increases as a matter of principle, noted that while some committee members upheld their promise to not raise taxes, not all remained true to their word. In voting to pass HB 889 out of committee, Rep. Steve Carter (R-Baton Rouge) broke the Taxpayer Protection Pledge that he signed.
 
“It’s unfortunate that Rep. Carter went back on his promise by signing off a massive tax hike that would hit Pelican State taxpayers in the middle of a recession.” said Grover Norquist, president of Americans for Tax Reform.  “However, there is still an opportunity for Carter to correct this misstep. ATR remains hopeful that he will reconsider his position and vote in the best interests of taxpayers when this comes to a vote before the full House.”
 
Rep. Carter was the only committee member to break his Pledge. The other Pledge signers on the Ways & Means Committee – Representatives Jane Smith (R-Bossier City), Cameron Henry (R-New Orleans), and Jerome Richard (Thibodaux-I) – all upheld their promise to constituents by voting “Nea.”
 
“Evidence from nearly every state that has unfairly targeted smokers for government revenue shows that very few tobacco tax hikes actually meet their revenue goals. Point of fact, you cannot fund broad spending programs on a declining revenue source. Smokers and non-smokers alike should be opposed to a tobacco tax hike. A tobacco tax increase today ensures a sales, income, or property tax increase down the road.” added Mr. Norquist. “What’s funny is that many proponents of this bill claim to defend ‘the little guy.’ In reality, a tobacco tax increase will be borne by those Louisianans least able to afford it. On average, smokers, whose median income is a little more than $36,000, make about 30 percent less than non-smokers. With Obama recently imposing a 61 cent federal tobacco tax increase, any additional levy at the state level will only add insult to injury. I urge all Louisiana legislators to reject HB 889.”

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Arizona Needs a Tax Me More Fund


Posted by Patrick Gleason on Monday, June 8th, 2009, 8:15 AM PERMALINK


Last week Sean Noble, author of the blog Noble Thinking, offered a solution for those that insist taxes must be raised in Arizona. Noble suggests "The Arizona Department of Revenue should expand the option of voluntarily paying more taxes by adding a form – let’s call it Form SITIC – for “stuff I think is critical.” Then, all these people who want to pay more taxes can check the box for what their additional contribution will fund."

ATR supports Noble's idea and notes that it is not without precedent. The solution Noble offers is a Tax Me More Fund. Arizona lawmakers can simply create a Tax Me More Fund so that people who feel they are under-taxed, like Gov. Brewer, Chuck Coughlin, and Randy Pullen, have a place to send their money. As it stands, 8 states already have a Tax Me More Fund in place.

The concept has it's origins in the cradle of the liberty movement in America. According to the Center for Fiscal Accountability, Massachusetts led the way in developing a Tax Me More Fund proposal at the turn of the century. After Bay State voters passed a 2000 referendum to lower income taxes, the Voluntary Optional Tax Endowment (VOTE) was introduced as a way for opponents of the tax cut to voluntarily pay at the old rate. In 2001, the MA legislature added a checkbox on its state tax forms in 2001 that allows the taxpayer to decide which tax rate to pay.

ATR agrees that those who claim taxes in AZ aren't high enough should be given the ability to put their money where there mouth is. ATR urges AZ lawmakers to introduce and pass a bill to create a Tax Me More Fund in the Grand Canyon State. The bill might be most appropiately titled "The Brewer-Coughlin Arizona Patriot Act."

For a list of states that have enacted Tax Me More Funds, Click Here

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