Patrick Gleason

California Group Looks to End Government-Sector Collective Bargaining


Posted by Patrick Gleason on Tuesday, February 8th, 2011, 9:03 AM PERMALINK


A Santa Barbara-based organization is currently drafting a measure for the statewide California ballot that would put an end to government-sector collective bargaining, undoing what was perhaps the most catostrophic policy enacted during the first Brown administration in the late '70s.

Larry Eberstein, president of the Santa Barbara taxpayers Association, described the issue as such:

“The problem is that the government exists to serve the people, not public employees. But the way we structured finance in our society now, on the government level, is government is acting mostly in terms of public employees’ interest, not the public interest….It’s just a non-progressive policy and simply a policy that benefits one special interest.”

California, facing a half of trillion dollar unfunded pension liability, is home to the nation’s largest ticking pension time bomb. Noteworthy is that calls for pension reform are becoming increasingly bipartisan, especially in blue states like California where left-of-center interests are beginning to recognize that ballooning pension costs are taking up an increasing share of the budget and diverting scarce state resources from progressive pet projects and programs. 

As the Manhattan Institute’s Fred Siegel recently noted in the Wall Street Journal, government-sector unionism is a relatively recent development, a product of the 1930s, that liberals originally had great reservations about:

“..in a 1937 letter to the head of an organization of federal workers, FDR noted that "a strike of public employees manifests nothing less than an intent on their part to prevent or obstruct the operations of Government until their demands are satisfied. Such action, looking toward the paralysis of Government by those who have sworn to support it, is unthinkable and intolerable."

Siegel is right to point out that public sector collective bargaining is not rooted in some deep-seated American tradition and was the result of a relatively recent political decision that can and should be reversed.

California isn’t the only place where this debate is being had. Most notably, Gov. Scott Walker has called for ending the morale hazard that is government-sector collective bargaining in Wisconsin. Other reform-minded governors would be wise to follow Walker’s lead.

Eberstein’s group is expected to formally submit their measure to newly-elected Attorney General Kamala Harris later this week. Given the spending power of government-sector unions in California, the campaign will need some serious cash to have a snowball's chance.

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New Study on Bag Taxes: Economically Destructive, Job-killing


Posted by Patrick Gleason on Wednesday, February 2nd, 2011, 5:10 PM PERMALINK


The bag tax that Washington, D.C. residents have been paying for over a year will precipitate a significant decline in disposable income and will result in more than 100 lost jobs, according to a new report  released today.

The study, commissioned by D.C.-based Americans for Tax Reform (ATR) and conducted by the Boston-based Beacon Hill Institute (BHI), examines the economic fallout of the D.C. bag tax. The study found the year old tax will destroy more than 100 local jobs and reduce real disposable income in 2011 by $5.64 million. This in turn will yield a loss of $108, 340 in sales tax revenue and will reduce investment in the District by $602,000.

For the full story in today's Washington Examiner, click here.

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Amazon Tax Rears its Ugly Head in California Once Again


Posted by Patrick Gleason on Wednesday, January 19th, 2011, 12:54 PM PERMALINK


The budget introduced by Gov. Jerry Brown last week has been a hot topic of discussion in the Golden State and nationally. And while Brown is calling for $12 billion in higher annual income, sales, and car taxes, legislative Democrats are now jumping into the fray and proposing their own ill-advised tax hikes.

Among the most misguided of proposals coming out of the Democrat caucus is Assemblywoman Nancy Skinner’s Amazon tax legislation, reintroduced just yesterday, that would illegally require out-of-state businesses to collect California’s highest-in-the-nation sales tax. Make no mistake, this new tax, commonly referred to as the “Amazon tax,” is a guaranteed job killer that wouldn’t even make a dent in California’s budget deficit.

Perennial attempts to pass this job-killing tax on e-commerce have been rightfully rejected in California and elsewhere. Aside from failing to address the real problem – overspending – and adding to the state’s 12% unemployment rate, an unconstitutional Amazon tax wouldn’t do squat to close the state deficit, estimated at $26.4 billion over the next 18 months.

Assemblywoman Skinner projects that an online sales tax will generate an additional $300 million annually for the state. While that projection is without basis in reality for reasons that I will get into in a moment, let’s assume Rep. Skinner’s faulty revenue projections and look at how much of a dent it would make on the state’s deficit. At $300 million in annual collections, an Amazon tax would chip a meager 1.1% off the state’s overspending-generated deficit. Yet the reality is that the state wouldn’t even realize that paltry sum. What’s that? You want a chart you say?

 

The fact is that Rep. Skinner’s proposal would raise no additional revenue for the state. In fact, as the chart above illustrates, the state would actually lose revenue, as has been evidenced by the handful of states that have enacted Amazon taxes.

Three states have enacted an Amazon tax in the past two years – Rhode Island, North Carolina, and Colorado – and all three have generated zero additional revenue from it.

Rhode Island General Treasurer Frank T. Caprio had this to say about his state’s Amazon tax:

“the affiliate tax has hurt Rhode Island businesses and stifled their growth, as they’ve been shut out of some of the world’s largest marketplaces, and [it] should be repealed immediately.”

As ATR has repeatedly explained to state legislators, Amazon taxes hurt small ad businesses and do nothing to fill state coffers. Rather, it has been demonstrated time and again that retailers will simply terminate contracts with advertisers in states that stupidly enact an Amazon tax to avoid creating a “nexus” and, therefore, being forced to collect this unconstitutional tax.

In 2009, 25,000 individuals and small businesses in California earned $1.6 billion from online advertising, paying $124 million in state income tax (plus employment tax, business tax, property tax, sales tax, etc). That is a revenue stream that will dry up if Skinner’s legislation passes.

It gets worse. Not only is the tax harmful to employers, the state of California could face a burdensome and costly lawsuit if Skinner’s legislation were to pass.

Not every state is a total failure; some just serve as bad examples. California legislators would be wise to learn from the bad examples set by lawmakers in RI, NC, and CO, rather than choose to serve as one themselves.

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ATR Responds to Falsehoods About the Taxpayer Protection Pledge


Posted by Patrick Gleason on Tuesday, January 18th, 2011, 9:59 AM PERMALINK


Ever since ATR sent a letter to California legislators, informing them that a vote to put Gov. Jerry Brown's proposed tax hikes on the ballot would be a violation of the Taxpayer Protection Pledge, union bosses and liberal editorial boards, namely the Sacramento Bee, have been busy knowingly spreading lies about the Pledge and smearing legislators who have signed it.

Our friends at the Sacramento Bee were kind to allow ATR president Grover Norquist to set the record straight in this past Sunday's Bee:

Another View: Tax pledge an important commitment to citizens

By: Grover Norquist

Re "D.C. interloper again seeks to dictate policy" (Editorial, Jan. 8):

The Bee's editorial board is confused about what the Taxpayer Protection Pledge is and who it is made to. The pledge is not a commitment to any one person or Americans for Tax Reform; what good would that be? The pledge is a commitment that the signer makes to their constituents. One need only read the simple language of the pledge, which states, "I ______, pledge to the taxpayers of the ______ district of the state of California, and all the people of this state, that I will oppose and vote against any and all efforts to raise taxes."

Americans for Tax Reform simply informs pledge signers when there is a vote that would violate their pledge, urges them to keep their pledge and educates voters as to who has maintained their commitment and who has not – a public service not always provided by the Fourth Estate.

The editorial board is not only confused about the pledge but apparently fails to understand those who make this important pact with voters. Republicans in the Legislature don't oppose tax increases just because they signed the pledge. They signed the pledge because they recognize that more tax increases will do nothing to fix the state's overspending problem and are sick of seeing employers pack up and move to Dallas and Austin.

The governor is free to place his massive tax increase before the voters through the initiative process. All he has to do is collect the necessary signatures. It's no secret that there are plenty of deep-pocketed union bosses who would be more than happy to help pay for signatures in the name of higher taxes. However, what Gov. Jerry Brown and the Democrats want, and what The Bee echoes, is a request that Republican legislators join hands in putting tax hikes on the ballot. Why? Because Brown and legislative Democrats want Republican fingerprints on their tax hike.

Unfortunately for the entrenched political class in Sacramento, New Jersey Gov. Chris Christie has shown Republicans from coast to coast that treating constituents like adults, implementing necessary austerity measures, standing up to entitled government employee union bosses, and saying no to further tax increases is both good policy and good politics.

I would encourage Brown to take notice of his Democratic counterpart in New York, Andrew Cuomo, who, in facing an equally grim fiscal reality, recently remarked that his state "has no future as the tax capital of the nation."

Neither does California.

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A Response to Criticism of ATR's Opposition to Gov. Jerry Brown's Budget


Posted by Patrick Gleason on Wednesday, January 12th, 2011, 1:33 PM PERMALINK


The following article by ATR president Grover Norquist and ATR state affairs director Patrick Gleason originally appeared in today's Flash Report:

Americans for Tax Reform sent a letter to all Taxpayer Protection Pledge signers in the California legislature last week, clarifying that a vote to refer tax increases to the ballot, as the new and improved Gov. Jerry Brown is asking them to do, would violate the Taxpayer Protection Pledge, a central campaign promise they made to their constituents to “oppose and vote against any and all efforts to raise taxes.”

Since sending that letter, the professional Left in California has accused ATR of attempting to“drown the middle class” and “take a wrecking ball to K-12 education”. If that weren’t enough, the Sacramento Bee editorial board nonsensically pilloried ATR staff forlack of offspring (you would think the Malthusian-population-control wing of the Left would admire that).

A couple of points in response:

1) There is nothing subjective about the determination that voting to refer higher taxes to the ballot is a violation of the Taxpayer Protection Pledge. A vote to put tax hikes on the ballot is clearly and indisputably a failure to “oppose and vote against any and all efforts to raise taxes.”

2) 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. 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. 

3) Critics say that ATR, in opposing a legislative referral of tax increases, is scuttling the Democratic process and preventing voters from having a say. Far from it. If Jerry Brown, the Sacramento Bee, Darrel Steinberg, et al. are dead set on putting higher taxes on the ballot – fine – go get the signatures needed to put it on the ballot. But don’t force lawmakers to do your dirty work and break a sacred campaign promise to voters in the process – a promise that was made just a few short months ago for many of the newest members of the legislature.

If Gov. Brown thinks the electorate has changed so dramatically since 2009 and Golden State residents will now go along with a massive tax increase, as his budget presupposes, he will have no problem getting the requisite signatures. Brown certainly won’t be lacking the funds necessary for a proper petition drive.

It’s no secret that California has a bevy of deep-pocketed government employee unions (how do you think the state got into this mess after all) that would be more than happy to fund a campaign for higher taxes – it’s kind of what they do. As was noted recently by The Economist, the top spender in U.S. politics from 1989 - 2004 was AFSCME. So again I say to Gov. Brown, go get the signatures.

 “You and I have different ideas of what being a Republican is all about because I'm not going to raise taxes.” That was New Jersey Gov. Chris Christie’s response after being questioned recently as to why he wouldn’t just take the easy way out and raise taxes. Fortunately for California taxpayers but unfortunately for Gov. Brown, nearly all Republicans in the legislature have indicated that they are of the same mind as Gov. Christie.

With California Republicans following the Christie-model, which has proven to be both good policy and good politics, Gov. Brown would be well-served to look to his Democratic counterpart in the Empire State, Gov. Andrew Cuomo, who recently remarked that New York “has no future if it's going to be the tax capital of the nation.” The exact same could be said of California. It’s time to address what truly ails the Golden State. Simply put, it’s the spending, stupid.

 

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Pennsylvania's Ed Rendell thumbs his nose at taxpayers on his way out the door


Posted by Patrick Gleason on Friday, January 7th, 2011, 12:36 PM PERMALINK


Despite failing to pass a job-killing severance tax during his final months in office, Gov. Ed Rendell is throwing up one last minute Hail Mary attempt to hose Keystone State taxpayers. ATR ally Chris Friend has the story in his latest column:

Shortly before leaving office, Rendell authorized $42 million in taxpayer money to be sent to the Philadelphia Regional Port Authority (PRPA) to help bail out the sinking Aker Shipyard in Philadelphia.

The funding, we are told, would prevent Aker from going under, since it would be building two new tanker ships. 

Of course, there’s one small problem.

There are no buyers for the ships.  And the prospect of that changing course anytime soon is virtually nonexistent.

For the full story on Ed Rendell’s farewell taxpayer boondoggle and how he’s using it to pay off his buddies, click here.

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Bogus Democrat Lies About Taxpayer Protection Pledge Repeated in NC State House Race


Posted by Patrick Gleason on Tuesday, October 26th, 2010, 10:29 AM PERMALINK


Democrat incumbent Hugh Holliman has hit Rayne Brown, his Republican opponent for North Carolina House District 81, with multiple attack ads in an attempt to mislead voters about the actual meaning of the Taxpayer Protection Pledge, which Brown has signed. In at least two commercials and one mailer, Holliman argues that Brown’s Pledge means she supports tax breaks for companies that outsource jobs. In reality, the goal of the Pledge is to protect North Carolina taxpayers and businesses from tax increases, and does not prevent revenue-neutral elimination of tax credits.

The “No New Taxes” Pledge simply commits a signer to “oppose and vote against any and all efforts to raise taxes.” By making this promise, Rayne Brown has taken tax hikes off the table for all taxpayers in North Carolina – something Hugh Holliman has not done.

If Holliman were smart he would actually avoid talking about taxes. Just last year Holliman voted for more than $1 billion in higher taxes on all North Carolinians in the middle of a recession. It was bad enough when Holliman was a tax hiker. Now he's proven himself to be nothing more than a lying tax hiker.

For a PDF of ATR's official statement, click here.

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Pennsylvania Senate to Take Up Unconstitutional Severance Tax Legislation


Posted by Patrick Gleason on Tuesday, October 5th, 2010, 3:58 PM PERMALINK


The Pennsylvania House passed legislation last week, SB 1155, that would impose a new severance tax on natural gas extracted from the Marcellus Shale and, at a rate of 39 cents per thousand cubic feet (MCF), make Pennsylvania the most heavily taxed natural gas producing state in the nation according to Harrisburg-based Commonwealth Foundation.

The measure passed 104-94 with 12 Republicans voting in favor. Of the 24 Taxpayer Protection Pledge signers in the Pennsylvania House, all but two upheld their Pledge by voting against this job-killing energy tax hike. Serial Pledge breakers, Reps. Camille George (D-74) and Richard Grucela (D-137), broke their commitment to constituents once again by voting for the severance tax.

The key point of debate was how the revenue from the severance tax, projected to bring in more than $300 million in its first full year of implementation, would be split. The bill that the House approved sends the first $70 million straight into the state’s general fund, the next $5 million is earmarked for job training. After that 32% of the tax revenue goes to local governments, 16% is directed to various environmental funds, and the remainder is tossed into the general fund. Many lawmakers who support a severance tax, voiced opposition to the way the House-passed bill allocates revenue from the new tax.

Rep. Karen Boback (R-117) contended in the Wilke-Barre Times Leader:

....a tax on natural gas should be about protecting our drinking water and supporting the infrastructure in the Shale region, not about building the coffers to support the out-of-control spending in Harrisburg.

Yet with over half of the revenue going straight into the general fund, padding government coffers to support out-of-control spending is primarily what this new tax will do.

Despite missing the self-imposed October 1st deadline for legislative approval of a severance tax, Gov. Rendell and state legislators continue to spread misinformation as they seek to ram through this unnecessary and unconstitutional tax increase.

In response to a recent ATR piece in the POLITICO explaining why a severance tax would be bad for Pennsylvania, Gov. Ed Rendell took to the same publication to claim that a severance tax is needed:

... to cover the burden that our taxpayers are now shouldering for environmental protection and cleanup, emergency services for accidents, road repair and other costs that come from drilling sites.
What Rendell fails to mention is that natural gas producers already pay all environmental clean up and infrastructure costs through existing taxes, fees, fines, and penalties. The fact is that Rendell wants to shake down energy companies to fund the state's structural overspending problem. Again, that's why most of the revenue from the proposed severance tax would go straight to Harrisburg and not the local communities impacted by drilling or environmental funds.
 
Rendell's other retort is that Pennsylvania should impose a severance tax because other natural gas states have a severance tax. Here Rendell's "all the other kids are doing it" argument iimplies that there is no economic cost to implementing a state severance tax because others have such a tax in place.
 
If that is the case, why don't we see countries crawling over each other to raise their corporate income to match the U.S.'s rate, which is second highest in the world. Is it perhaps because there is some competitive and economic advantage to maintaining a lower rate? I would argue so.
 
If Rendell's logic held up, then Ireland would cheerfully be going along with the EU's efforts to force an increase in the Emerald Isle's corporate income tax rate to match the rates found on the continent. Clearly there would be an economic cost to eliminating or reducing this competitive advantage. As a result, Ireland is smartly refusing pressure to raise their rates.
 
Given Rendell's reasoning in support of a severance tax, it's not surprising that he was issued a D in the CATO Insitute's latest Fiscal Policy Report Card.
 
The good news is that the House-passed severance tax appears to be dead on arrival in the Senate, where Republican legislators who control the chamber publicly voiced opposition to both the onerous tax rate set by the House and the fact that the House-passed legislation would likely be deemed unconstitutional by the courts.

ATR will continue to work to defeat this ill-advised and unconstitutional tax increase as it moves to the Senate next week. Gov. Rendell

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False Attacks Lobbed Against Mass. GOP Gubernatorial Candidate Charlie Baker


Posted by Patrick Gleason on Wednesday, September 29th, 2010, 5:20 PM PERMALINK


Bay State Future, and independent liberal group affiliated with the Democratic Governors Association (DGA), recently began running bogus attack ads against Massachusetts Republican gubernatorial nominee Charlie Baker for signing the Taxpayer Protection Pledge.

Their claim: Signing the Pledge is proof that Baker “favors tax loopholes that encourage corporations to ship jobs overseas.”

Really? Let’s look at what the Pledge he signed actually says. In signing the Taxpayer Protection Pledge, Charlie Baker has simply promised Massachusetts residents that he will “oppose and veto any and all efforts to raise taxes.”

How Bay State Future takes that and equates it to shipping jobs overseas is beyond me, or any objective observer for that matter. This is not surprising though. As the midterm elections approach and the Left becomes increasingly desperate to stem the tide of voter retribution that awaits them on Nov. 2nd. They are avoiding substantive policy discussions and downright misleading voters. This false attack on Baker’s signing of the Pledge just being the latest example.

Sadly for Bay State Future, they couldn’t even come up with this patently false attack ad on their own; it’s merely a retread of ads first issued by the Democratic Congressional Campaign Committee (DCCC) earlier this year that have since been deemed false and misleading repeatedly by unbiased analysts.

As ATR's Adam Radman articulated yesterday about this very same false attack:

The claims about outsourcing....have repeatedly been debunked by a number of non-partisan news sources. In Nevada, Jon Ralston of Face to Face reviewed a similar Democrat attack ad against the Pledge and found it to be “thoroughly misleading.” Earlier in the year, Factcheck.org found claims against the Pledge by the Democrat Congressional Committee to be “blatantly false.” King 5 TV, a news show in Washington state, called the attacks against the Pledge and Dino Rossi by Sen. Patty Murray’s campaign “a stretch.”
Daniel Patrick Moynihan famously stated that “everyone is entitled to his own opinion, but not his own facts.” Gov. Deval Patrick, the DGA, and Bay State Future may be of the opinion that higher taxes should always be on the table. However, the fact remains that Charlie Baker’s pledge to stop all further tax increases will improve the commonwealth’s business tax climate and actually entice more employers to set up shop and create jobs in the Bay State.

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Pennsylvania House to Vote on Energy Tax Increase Today


Posted by Patrick Gleason on Wednesday, September 29th, 2010, 12:04 PM PERMALINK


Today the Pennsylvania House of Representatives will vote on SB 1155, legislation that would impose the state’s first ever severance tax on natural gas extracted from the Marcellus Shale.

An amendment offered by Rep. Kate Harper (R-Montgomery) was approved last night that will provide the necessary Republican votes to pass the severance tax on the House floor today. Harper’s amendment reduces the amount of severance tax revenue - expected to generate $110 million in the current fiscal year and more than $300 million in FY 2011-2012 budget - that goes to the general fund and allocates a greater share for various environmental funds.

As ATR has pointed out for more than a year and a half, a severance tax is not necessary and will adversely impact the Pennsylvania economy. Politically, it’s particularly ill-advised for Republicans, who hope to retake the PA House in just a few weeks, to join hands with Democrats in passing a tax hike on one of the few industries in the region that is actually creating jobs. As I pointed out in The Daily Caller  this week, doing so will make it nearly impossible for them to run this fall against the higher taxes and unsustainable spending coming out of both DC and Harrisburg.

It’s unclear how Senate Republicans, who hold a 30-20 majority in that chamber, will receive the House version of the severance tax but many believe it is dead on arrival in the upper chamber due to the onerous rate set by the House, which at 39 cents per thousand cubic feet would be the highest severance tax in the country.

The House bill also has some legal issues that could torpedo the whole plan. From today’s Pennsylvania Independent:

State Rep. Scott Perry (R-York) said the bill was unconstitutional because the House chose to amend the severance tax language onto a bill which originated in the Senate.  According to the Pennsylvania Constitution, all spending and tax bills must originate in the House of Representatives.

The bill may also violate the constitutional provision for single purpose bills, since the legislation originally contained in S.B. 1155 was not connected to a severance tax.  House Republican spokesperson Steve Miskin said the bill, if passed, would almost certainly have to survive a lawsuit from gas companies before any tax revenue could be collected.

A number of House Democrats have even expressed concern about strategic wisdom of passing an energy tax hike just prior the midterm elections. Rep. Nick Kotik (D-Allegheny) in today’s Pittsburgh Tribune-Review:

It's asking (Democratic) members already in a vulnerable position because of (President) Obama and Rendell fatigue to vote for this…It can be construed by anyone running for election as a massive tax increase.

Yes, Kotik is right that today’s severance tax vote can be viewed as a “massive tax increase,” because that's exactly what it is.

ATR will continue efforts to defeat this job-killing tax increase when it heads to the Senate.

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