Patrick Gleason

ObamaCare Precipitates Premium Spike; Can't Say We Didn't Tell You So

Posted by Patrick Gleason on Thursday, September 29th, 2011, 4:16 PM PERMALINK

Washington press and political circles have been abuzz this week over the new Kaiser Family Foundation survey that found families enrolled in employer-provided health care plans have seen their premiums rise by 9 percent in just the past year, a significant increase. The Kaiser Foundation’s report attributes over 16 percent of the premium hike to ObamaCare.

A Wall Street Journal editorial from yesterday noted that (emphasis added):

“Much of this surge is due to ObamaCare's new coverage mandates, and in anticipation of insurers becoming public utilities with government imposing price controls on rates.”

While the premium spike has many in the press and professional Left baffled, they can’t say they weren’t warned. In December 2009, during the height of the health care debate on the Hill, I and ATR’s Ryan Ellis made the case in an OC Register op-ed that the increase in insurance mandates sought by President Obama and congressional Democrats would have the opposite effect of bending the cost curve:

Health insurance mandates are government-imposed requirements that insurers and health care plans either cover, or offer coverage, for a condition or treatment. As recently as the 1960s, mandates were few and far between. However, today there are more than 2,000 mandates imposed by the federal and state governments.

Health insurance mandates drive up the cost of health insurance significantly. According to a recent study by the Council for Affordable Health Insurance, insurance mandates increase the cost of a basic health care plan by 20 percent to 50 percent. This estimate is based on analysis of insurance policies, not theories or modeling.

To understand how mandates drive up health insurance costs and price many out of the market, consider the following hypothetical situation: A new college graduate is in the market for a new car. At this point in her life she just wants reliable transportation. However, the government requires her to buy the fully loaded Lexus, with heated seats, navigation system and pricey options, even though that is not what the customer needs or can afford.”

ATR wasn’t the only one sounding the alarm. This from J.P. Wieske, Executive Director of the Council for Affordable Health Insurance:

“While some state and federal legislators continue to pass new mandated benefit laws, others recognize that mandates drive up the cost of health insurance and make health insurance policies unaffordable for millions of Americans. As implementation of the new federal health insurance law further drives up the cost of health insurance, the cost of adding new mandated benefits will become a more important issue.”

That said, as the aforementioned WSJ editorial made clear, Republicans do not have clean hands on this issue either, failing to pass legislation sponsored by former Congressman John Shadegg that would’ve helped rectify the matter when they controlled both chambers on the Hill. The Shadegg bill would have permitted consumers to buy health insurance from anywhere in the country. Shadegg’s proposal lives on in the form of H.R. 371, Congresswoman Marsha Blackburn’s Health Care Choice Act of 2011, which ATR supports.

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Silicon Valley Becomes Rent Seeking Valley Under Obama

Posted by Patrick Gleason on Monday, September 26th, 2011, 11:33 AM PERMALINK

During President Obama’s recent visit to North Carolina, ATR highlighted how his policies adversely impact small businesses in the Tar Heel State. Today the POTUS travels to Silicon Valley, where his economic agenda has had an equally deleterious effect on a region renowned globally as a hub of ingenuity and innovation. A Wall Street Journal article from last November highlights how President Obama’s command and control energy policies, in addition to his obsession with “green jobs” is having the effect of transforming Silicon Valley into place populated by companies whose business models rely on taxpayer subsidies, government mandates that consumers buy their product, or both:

“In the past, Kleiner Perkins funded scores of vital ventures, from Apple and Applied Materials to Amazon and Google. But now Kleiner is moving on to such government- dependent firms as Miasole, Amyris Biofuels, Segway and Upwind Solutions. Many have ingenious technology and employ thousands of brilliant engineers, but they are mostly wasted on pork catchers.

Other venturers plunged into solar panel manufacturer Solyndra, which received some $500 million in federal subsidies and a campaign visit from Barack Obama before laying off 17% of its work force and giving up on a new factory that was supposed to create 1,000 green jobs

Many of these green companies, behaving like the public-service unions they resemble…Virtually every new venture investment proposal harbors a 'green' angle that turns it from a potential economic asset into a government dependent....the green campaign wastes scarce and precious technological and entrepreneurial resources indispensable to the nation's future.”

While Obama’s energy policies are turning Silicon Valley into a hub of government-dependent, rent seeking start-ups, the onerous tax and regulatory burden imposed by the Democratic-controlled California legislature is making the valley a less attractive place to start a company and create jobs. Don’t take it from me; take it from Scott McNealy, co-founder and former CEO of Sun Microsystems:

“I see a migration from the early days of the Valley. We aren't doing manufacturing; we aren't doing design; we aren't doing computers. It's all moving to Asia and other places where there are lots of technical engineers who are willing to work at a more reasonable salary because they don't have to spend $3.5 million on a home and pay half of it to taxes.

I think every new transition has created less job opportunity as technology has become very leveraged. I don't think our education system, our regulations, our government policies have kept pace with the changes that technology is driving…It's not the Valley. It's the overhead and the overhang, the clouds brought in by Sacramento and Washington, D.C., the regulations, the deficit and the misallocation of resources. It's all of those things. Obviously, I'm a believer in the private sector and in personal responsibility.

The biggest issues with the Valley are local, state and federal governmental overreach and overregulation. It's over-pensioned, over-unionized and over the top.”

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Obama's Economic Policies Given Test Run by D.C. City Council

Posted by Patrick Gleason on Thursday, September 22nd, 2011, 7:36 PM PERMALINK

This week the notoriously dysfunctional and economically illiterate Washington, D.C. City Council rammed through an upper-income tax increase on District residents and small businesses. The measure, which passed by a 7-6 vote, raises the tax rate on incomes in excess of $350,000 by 5 percent, taking the rate from 8.5  to 8.95 percent, and leaving D.C. with the dubious distinction of having one of the highest marginal rates in the country.

Foregoing normal legislative protocol, the proposal, which was hastily concocted behind closed doors, bypassed the tax and revenue committee and was approved without public input. Even the Washington Post editorial board referred to it as “D.C.’s irresponsible tax hike.” To borrow a tongue and cheek phrase from the Wall Street Journal’s erudite James Taranto, when you’ve lost the Washington Post editorial board, you’ve lost middle America.

Councilman Phil Mendelson and Mary Cheh, the tax hike’s chief proponents, utilized the same class warfare and soak-the-rich rhetoric that the White House has perfected in recent weeks. Yet, as with President Obama, Mendelson and Cheh fail to realize the consequences of their actions. The fact is their tax increase on “the rich” takes its toll on small businesses, since the individual income tax system is the one under which they file. In fact, according to IRS data, over 52,000 small businesses in the District of Columbia pay D.C.’s income tax, which was already onerous and uncompetitive prior to this week’s events. Nearly 5,000 D.C. small businesses pay taxes on annual income in excess of $200,000, and a large portion of these employers will see a reduction in their job-creating capacity thanks to the misguided and opaque actions of D.C.’s corrupt City Council. In this gloomy and uncertain economy, it is unconscionable that lawmakers would do anything that would make employers less likely to hire, yet that’s precisely what Mendelson, Cheh and company did this week.

Such an economically-damaging tax increase would be bad enough by itself, but the fact is that it is also completely unnecessary. The District is currently sitting on an $89 million surplus, and that’s even after ramping up spending by 8 percent in just the past year. The tax increase is projected to yield a little over $100 million over the next four years. However, given the DC Council’s poor revenue projection record, don’t be surprised if this latest tax increase misses the mark when businesses and high earners, who are the most mobile, adjust their behavior or simply relocate. D.C.’s neighbors to the north have already shown what happens when lawmakers sack the rich. In 2008 Maryland Gov. Martin O’Malley signed into law a new tax bracket on millionaires, only to see the number of millionaires filing taxes in Maryland drop by a third the following year.

D.C. residents and those thinking of moving to the District don’t have to go far to avoid the higher rates found in the nation’s capital. As the Tax Foundation noted yesterday, “High-income taxpayers who plan to move to D. C. may choose to live in Maryland where they would be subject to 5.5 percent statutory income tax rate (plus local income taxes as high as 3.2 percent), or Virginia where they would be subject to 5.75 percent income tax rate.”

The saying goes that taxpayers vote with their feet, leaving high tax locales for more friendly tax climates. Don’t be surprised to see Washington families and employers vote with their metro cards as a result of the D.C. Council’s actions this week.


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President Obama Visits North Carolina, Where His Policies Have Taken a Heavy Toll

Posted by Patrick Gleason on Tuesday, September 13th, 2011, 1:01 PM PERMALINK

President Obama will be using taxpayer dollars to do what is effectively a campaign event tomorrow in North Carolina, not coincidentally a place which many consider to be a must-win state for him in next year’s election. While in the Tar Heel State, President Obama will be touting his new "Jobs Act," which entails another round of “stimulus, but don’t call it stimulus” spending in excess of $400 billion, mostly funded by tax increases. In a recent column in The Daily, the NRO’s Reihan Salam laid out some good reasons as to why Obama’s new proposal, in addition to being simply more of the same, is the wrong prescription:

On Obama’s proposal to raise taxes on energy companies –

“Incredibly, the president used a jobs speech to make the case against ‘tax loopholes for oil companies.’ To translate this into language we can all understand, the president is calling for increased taxes on drilling new oil and gas wells. This is despite the fact that we’ve only just unlocked vast amounts of domestic shale gas, an energy source that could reduce our dependence on oil imports and spark a jobs boom. If the central problem facing our country is that we have too many blue-collar jobs in the energy sector and that we rely too heavily on domestic energy sources, one could make a strong case for closing these tax loopholes. But if the opposite is true, as I think it is, this is a counterproductive step.”

On Obama’s continuation of class warfare by calling for higher taxes on upper income households –

“The president reminded us that very rich Warren Buffett thinks the rich should pay higher taxes, for which the Sage of Omaha has won great praise. Yet it is important to remember that Buffett, like all investors, pays corporate income tax through the companies he owns. These taxes eat into Buffett’s vast fortune, and that’s just fine with me. But corporate taxes also eat into the wages of workers. While the Congressional Budget Office assumes that 100 percent of the burden of corporate taxes fall on the Buffetts of the world, a conservative estimate is that at least 40 percent is borne by labor.”

Salam concludes that “On almost every front, the president seems to be moving the United States in the wrong direction.”

It’s also worth noting that the President’s dubious new jobs plan comes on top his FY ’12 budget proposal, which entails a massive tax increase on small businesses, who create 64% of new jobs and are the drivers of economic growth, which both North Carolina and the nation desperately need. Earlier this year I explained in The Daily Caller the toll Obama’s budget would have on small businesses from Cashiers to Cape Hatteras and how, unfortunately for North Carolina entrepreneurs, Gov. Bev Perdue’s treatment of job creators is no better:

“….under Obama’s budget proposal, the top marginal rate at which most small business profits are taxed would increase 13%, from a rate of 35% to 39.6%, yielding a $709 billion tax increase on individuals and small businesses over the next ten years...According to IRS data, of the 4.2 million individual income tax returns filed in North Carolina in 2008 (the most recent year for which data is available), nearly 660,000 of them were small businesses, and that’s just sole proprietors.  Including the share of small businesses made up of S-Corps and partnerships, upwards of 825,000 small businesses file under the individual income tax system in North Carolina and would be adversely impacted by President Obama’s budget.  

Unfortunately for small businesses in the Tar Heel State, along with the hanging guillotine of higher taxes proposed by the White House, North Carolina Governor Beverly Perdue has already hamstrung and taken her pound of flesh from employers, signing into law over a $1 billion in higher annual taxes, hitting small businesses with an individual income tax hike and the rest of the business community with an increase in the corporate rate.”

If that weren’t enough, Gov. Perdue is also running the White House ground game in North Carolina to prevent the legislature from blocking implementation of what many consider to be the most economically destructive policy to come out of Washington in the last two years – ObamaCare. To read more about Perdue’s efforts to ensure the implementation of ObamaCare and the $500 billion in higher taxes it entails, click here.

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Think Progress publishes lies about the Taxpayer Protection Pledge (shocker)

Posted by Patrick Gleason on Monday, August 29th, 2011, 6:24 PM PERMALINK

Think Progess has a post up today on a recent townhall event held by Congressman Dan Lungren and what they think is a scathing indictment from a hostile audience member - click here for the post.

As it would happen, what the folks at Think Progress find to be so damning is nothing more than an incorrect assumption, if not outright lie. During question time at the town hall, the aforementioned audience member incorrectly portrays the Pledge as a promise to Grover Norquist, president of Americans for Tax Reform. The spending interests on the Left repeatedly try to misinform the public with this tired and patently false claim. ATR noted the following earlier this year when similar lies were lobbed at Republican state legislators in California:

Critics wrongly contend that California legislators who signed the Pledge have vowed allegiance to some single person or organization. A quick read of the simple language of the Pledge proves such allegations to be false.

The same goes for Congressman Lungren; Taxpayer Protection Pledge that he signed is to his constituents. A pledge to one person or organization would be just plain silly and meaningless. Our previous response to such allegations at the state-level goes on to explain that the problem with such baseless attacks that we frequently see from opponents of the Taxpayer Protection Pledge, like our friends at Think Progress, is due to an error in the way that, well, they think.

In fact, those who deride Pledge signers have a chicken-and-egg problem. Pledge signers are not opposed to raising taxes or referring higher taxes to the ballot simply because they signed the Pledge; the fact is that they signed the Taxpayer Protection Pledge because they recognize that imposing more job-killing tax increases in one of the most onerously taxed jurisdictions on the planet is not a solution to California’s overspending problem.

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California Tries to Re-enact Internet Tax and Circumvent Voters

Posted by Patrick Gleason, Kelly William Cobb on Monday, August 29th, 2011, 11:36 AM PERMALINK

The following piece is crossposted from FlashReport. org.

Americans for Tax Reform is active in all 50 state capitals and from this perspective one thing is clear, when it comes to legislative creativity, lawmakers in Sacramento have every other state easily beat – no contest. Unfortunately for those currently contending with the state’s nearly 12% unemployment rate, California legislators only seem to use their creativity for the purpose of enacting job-killing tax increases and other measures that only serve to further depress the Golden State’s already flagging economy.

The latest exhibit of this unfortunate fact is Assembly Bill 155, legislation that, if Democrat lawmakers have their way, would “gut-and-amend” an existing bill to re-enact a sales tax on out-of-state and online purchases signed into law by Gov. Jerry Brown in June. The end goal of this legislation, pushed by the often misguided and incorrect Sen. Loni Hancock, is simply to block California voters from deciding the fate of the controversial online sales tax on the ballot. Gov. Brown has been stressing the need for job creation lately, yet let’s not forget that the application of his signature to that legislation cut off a vital source of income for many Californians, with 25,000 Golden State advertisers losing some or all of their business as a direct result.

Sacramento’s latest Internet tax plan is nothing more than an end-run around the will of the people and an effort to enshrine the enactment of an economically destructive tax increase into law. Fortunately this measure is subject to a two-thirds vote requirement, and as such, Republican lawmakers can block it if they keep their commitment to their constituents.

This morning ATR sent a letter to all California legislators making clear that AB 155 is a violation of the Taxpayer Protection Pledge, and strongly urging opposition to this ill-advised legislation. For a copy of the letter, click here.

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The case for Corbett's stand

Posted by Patrick Gleason on Tuesday, July 19th, 2011, 8:47 AM PERMALINK

Today's Philadelphia Inquirer features the following op-ed by ATR director of state affairs Patrick Gleason:

Gov. Corbett's greatest success in his first six months in office was closing a more than $4 billion budget gap without further soaking the taxpayers of Pennsylvania, who already contend with the nation's 10th-highest state and local tax burden.

Americans for Tax Reform's Taxpayer Protection Pledge, which Corbett signed, is often denounced as too "rigid," and the governor has been criticized for signing it. But the state budget that went into effect this month highlights the efficacy of the pledge in promoting fiscal restraint and helping politicians focus on government's real problem: overspending.

Even Corbett's fellow Republicans in the legislature chafed at his refusal to consider tax increases. Yet in taking higher taxes off the table, he sent a message to lawmakers that the state has a spending problem, not a revenue problem.

The budget Corbett signed into law represents a year-over-year reduction in state spending of about 3 percent. The last time that happened, the Phillies were preparing to move into a brand new facility called Veterans Stadium.

To continue reading, click here.

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What Capitol Hill Republicans can Learn from the California GOP

Posted by Patrick Gleason on Friday, July 1st, 2011, 11:01 AM PERMALINK

In today's POLITICO, ATR explains the lesson that Republicans at the federal level should take away from the recently concluded California budget standoff:

This week marked a huge victory for the GOP in the deficit reduction debate — but in California, not in Washington.

Gov. Jerry Brown has spent the past six months trying to get Republicans to sign on to a renewal of the largest state tax increase in U.S. history. But he finally gave up earlier this week and agreed to sign a budget that attempts to put expenditures in line with revenues, without further soaking California families and employers already contending with one of the highest tax burdens in the nation.

What the GOP was able to accomplish in California should serve as a model for its Republican counterparts on this side of the Potomac. As is the case on Capitol Hill, Republican votes are required to raise taxes in California — where a two-thirds vote is required to pass tax hikes or refer them to the ballot.

Click here to continue reading.

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ATR: Oppose House Bill 641, Internet Tax and Physical Nexus

Posted by Patrick Gleason on Friday, June 24th, 2011, 10:08 AM PERMALINK

[PDF Version]

June 14, 2011

Louisiana State Senate

RE: Oppose House Bill 641, Internet Tax and Physical Nexus

Dear Senator,

I write in strong opposition to House Bill 641, which would establish an Internet tax
and loosen Louisiana’s physical nexus standard for tax collection. HB 641 intends to
require out-of-state retailers to collect and remit sales tax on products purchased by
residents. Yet, the legislation will do more to harm in-state businesses and make out-of-state
retailers think twice about investing in Louisiana.

HB 641 attempts to partially dissolve the physical nexus standard for tax collection and
pushes the long arm of the tax collector past its appropriate state boundary. The U.S.
Supreme Court’s ruling in Quill v. North Dakota forbids states from forcing out-of-state
businesses with no physical presence to collect and remit sales taxes. HB 641 attempts to
circumvent this law by presuming a company has a nexus if business is solicited through a
third-party advertiser in the state or if an out-of-state retailer takes even a very small
ownership stake of a company in Louisiana. The measure flies in the face of the Supreme
Court’s ruling and is currently undergoing legal challenge in New York.

HB 641 will inadvertently punish Louisiana businesses and deter outside investment.
If having in-state advertising affiliates creates a nexus for out-of-state retailers, they will
simply terminate agreements with Louisiana businesses to avoid unconstitutional tax
collection, as has occurred in at least four other states. Furthermore, it will make out-ofstate
retailers hesitant to invest in Louisiana by forcing the investing company to also
become a tax collector, even if they themselves lack a physical presence.

Despite its objective, HB 641 will not level the tax collection playing field with brick-andmortar
stores. Since retailers will sever advertising and other ties to avoid the
unconstitutional tax, they will have no nexus for tax collection in Louisiana, as confirmed by
the measure’s fiscal note. The likely outcomes of this bill make for bad tax policy and
the intent – leveling the playing field – irrelevant.

Poor enforcement of “use tax” law is no justification for unconstitutional legislation,
especially if it negatively impacts Louisiana businesses. We urge you to reject House Bill
641, and any effort to tax Internet sales or reach outside of Louisiana for tax collection. If
you have any questions, please contact Kelly William Cobb or Patrick Gleason at (202) 785-


Grover Norquist
President, Americans for Tax Reform

CC: The Honorable Bobby Jindal, Governor

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In California: The Right Veto for the Wrong Reason

Posted by Patrick Gleason on Friday, June 17th, 2011, 12:25 PM PERMALINK

The following was originally published in today's Flash Report:

Although Gov. Brown did the right thing in vetoing the horrendous and irresponsible budget passed by legislative Democrats this week, praise must be withheld given the reason for his veto: he wishes to extend the largest state tax increase in U.S. history.

The Democrat budget passed on Wednesday represents the height of fiscal fantasy – forgoing debt repayment, delaying payment of other bills, illegally requiring out-of-state businesses to collect and remit the state sales tax, and assuming salvation in the form of more cash from a federal government that is $14 trillion in the hole itself. The Los Angeles Times referred to the Democrat budget as “clever accounting.” I went to public school, but the last time I checked, “clever” was not a synonym for “fraudulent.” Senate President Darrell Steinberg unbelievable remarked that this sham budget was “worthy of the governor’s signature.” Jerry Brown should take great offense to Steinberg’s affront of his John Hancock. By passing this irresponsible, unrealistic, and unconstitutional budget, legislative Democrats have proven that they are nothing more than self-serving agents of the unsustainable Sacramento status quo.

To continue reading, click here

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