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Rhode Island Weighs Tax Reform

Posted by Paul Blair on Tuesday, May 6th, 2014, 4:23 PM PERMALINK

The Rhode Island legislature has toyed with the idea of reducing the state sales tax for the past year. The small size of Rhode Island opens it up to lost business as taxpayers can easily purchase less expensive goods without real effort in neighboring states. That's precisely why reducing the sales tax from 7% to 3% is a good idea.

Cross border purchases will have the predictive effect of new revenue for the state. A reduction in the sales tax would also lessen the overall tax burden on Rhode Island low-income families while creating jobs that will provide opportunities for upward income mobility. The 4 point reduction in the sales tax will create more than 13,000 jobs according to the Rhode Island Center Freedom and Prosperity. 

A dynamic analysis of the tax reform proposal projects that although the state would lose $433 million in sales tax revenue, income tax receipts will increase by more than $200 million as well as revenue collected on cigarettes and alcohol. With greater economic activity and population growth over time, the state would also likely experience higher revenue from a wide range of things including gasoline. According to the report, the net state budget impact would be less than $50 million, a figure easily addressed with small spending cuts.

The bill is being sponsored by Democrat Representative Jan Malik, who says, "We have to find a way to lower taxes to make us more competitive with other states." 

Rhode Island has one of the highest statewide sales tax rates in the nation, though the application of the tax is extremely narrow, applying to only about a quarter of goods and services. The best designed tax system has a broad base and low rates. Dropping the rate to 3% addresses the second and is certainly a huge step in the right direction. Genuine tax reform should address the issue of Rhode Island's narrow sales tax base as well, in a revenue neutral way. 

"This important legislation would take a step in the right direction towards reversing course on decades of uncompetitive and anti-growth tax policies that cripple the Ocean State economy. Whether this bill’s full impact is phased in over several years or adopted immediately, it is a bold move in the right direction. The full legislature should have the opportunity to debate this bill’s merits which include more jobs, more investment, and a reduced burden on Rhode Island taxpayers," said Grover Norquist, president of Americans for Tax Reform. 

Rhode Island's sales tax isn't the only tax that is among the highest in the nation. The corporate income tax stands at 9%, which is the 6th highest among states levying a corporate income tax. The Ocean State has a long way to go to boost business and tax competitiveness and bills that address both of these issues should be debated by the full legislature in the coming weeks. 

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Florida Governor Rick Scott Delivers on Promise, Cuts Taxes by $500 Million This Year

Posted by Paul Blair on Monday, May 5th, 2014, 1:44 PM PERMALINK

Last week, the Florida House and Senate unanimously passed another $105 million in tax relief on the final day of the legislative session. This brings the total for 2014 to $500 million, meaning Governor Rick Scott delivered on his March promise, to the dollar.

These were his words in his March State of the State Address:

“Together, we have cut taxes 24 times already and my hope is that we are about to cut them again... by another $500 million this year. As I tell the hard-working people of Florida as I travel our state: We want you to keep more of the money you earn because it's your money!”

S.B. 156, the first round of tax cuts was a $395 million tax cut which repealed a car tax increase signed into law by former Governor Charlie Crist in 2009, will save Floridians between $20-$25 per vehicle registration. That unanimously passed the House by a vote of 116-0 and Senate 40-0.

The most recent tax relief package includes new sales tax holidays for hurricane preparedness, back-to-school shopping, and energy saving appliances in September. It also includes the elimination of taxes on college meal plans. This $105 million tax cut also passed both the House and Senate unanimously.

Though the governor originally called for "cutting the tax on business leases and rolling back the business tax," the sales tax relief still takes a step in the direction of letting Floridians keep more of their hard-earned money.

The governor agreed, saying, “This is an extraordinary year. Let’s think about what we accomplished. $500 million back in Florida families’ pockets."

This stands in stark contrast to former Governor Charlie Crist’s fourth year in office, and record of accomplishments in general. The Republican, turned Independent, turned Democrat raised taxes by $2.2 billion, breaking his Pledge to oppose higher taxes, and has little economic accomplishments to speak of.

Click here to read our “Tale of Two Governors: Charlie Crist vs. Rick Scott.”

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Judy Mccracken

Scott cost us our Train, our Train money,the jobs & support companies that went with it....... now a private company has taken up the task..... he also is in cahoots with the "privatization" of jails with one of the most brutal private jailers in the country.....

Judy Mccracken

Who is behind 'Americans for tax reform"..... anyone we might know?

Judy Mccracken

Scott is a Medicare thief.... his company was fined 1.7 BILLION for fraud...he took the 5th 75 times..... he bought the last election with his millions and help from the koch's tea party........ the first thing he did aft taking office was to give companies tax breaks........a vote for him is a vote for big business & the his buddies in the 1%........

What has he done for the working folks beside cutting back on the unemployment comp fund?...
What more koch agenda, vote for scott.....

ATR Launches Campaign Against Seminole County "Penny Tax"

Posted by Paul Blair on Wednesday, April 30th, 2014, 1:36 PM PERMALINK

County Commissioners in Seminole County, Florida are asking taxpayers to fork over more money to pay for special projects after a series of "temporary" sales tax increases expired in 2012. County commissioners at the time decided not to renew the 10-year sales tax increase because they had at least $40 million in reserves. 

After spending nearly all of it, they're asking voters to approve a measure on the May 20 special election ballot that would raise the sales tax to 7 cents on the dollar for another 10 years, yielding more than $630 million in higher taxes for the county to spend. Americans for Tax Reform opposes the massive tax hike and has launched a campaign to educate voters about where their money is going and convince them to reject the "Penny Tax." 

A recording of the first call to registered voters can be heard here

"Hi, this is Linda Adams from Americans for Tax Reform calling to alert you to a tax increase on the May 20th ballot in Seminole County. The "Penny Tax" is a massive $631 million sales tax increase. County Commissioners took millions from the last tax increase meant for roads and spent it on the federal SunRail train project. They can't be trusted to spend your money the right way. If you're sick of getting nickel and dimed, vote AGAINST the Penny Tax. This call was paid for by Americans for Tax Reform."

The two 10-year sales tax increases that ran back to back took hundreds of millions of dollars from Seminole County taxpayers to fund a number of special interest projects. The first tax increase from 1991-2001 redirected $46 million for the federal train project known as SunRail, $36 million of which was spent between 2011-2013, according to an analysis of SunRail contributions remitted to FDOT from the county. That tax increase was designed to improve roads and safety but some was spent on SunRail, which was neither. 

Voters and taxpayers alike should be suspicious about what County Commissioners claim their tax dollars are being spent on. An audit report released Tuesday shoes that Seminole County had a balance of more than $210 million as of last September. As the Orlando Sentinel notes, "county officials say that money already is set aside for projects." Voters should demand more transparency than a promise that $210 million in funds is already dedicated to projects. 

Don't get nickel and dimed, vote against the Seminole County "Penny Tax." 

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West Virginia's Lance Wheeler Challenges Dr. Tom Takubo to Sign Pledge in 17th State Senate District

Posted by Paul Blair on Tuesday, April 29th, 2014, 2:21 PM PERMALINK

Efforts to regain control of the West Virginia legislature for the first time in more than eighty years have led to a number of competitive primaries throughout the state. One such race is West Virginia's 17th state Senate district in Kanawha County, a district that went 57 percent for Mitt Romney in 2012. 

In a recent editorial board meeting with Charleston's Daily Mail, all three candidates sat down for a meeting to discuss taxes, regulations, transportation, and a number of other issues. Of note, only one of the candidates refuses to take tax hikes off the table by signing the Taxpayer Protection Pledge to West Virginia voters: Republican Dr. Tom Takubo. His Republican opponent Lance Wheeler brought that up in the editorial board meeting. 

Lance Wheeler: "One of my top priorities is jobs. If we're going to fix the jobs crisis here, we have to do it by lowering taxes and limiting the amount of regulations. I actually signed the Taxpayer Protection Pledge, which pledges as a state Senator I will never vote to increase taxes on West Virginians or their businesses." (4:50) 

Lance Wheeler: "I've signed the Taxpayer Protection Pledge, which I'm not sure my opponent in the primary Tom Takubo has signed yet…I will make the pledge that I will not raise taxes... We do not have a revenue problem here in West Virginia, we have a spending problem."

Dr. Takubo: "I tell my patients, wait until you make any decisions…To handcuff myself is the wrong thing to do and if you're experienced enough, you know that. You gotta keep options on the table." (17:00)

Despite going on to acknowledge that there is unnecessary waste and bureaucracy in Charleston, Dr. Takubo refuses to put his opposition to higher taxes in writing by signing the Pledge because he wants to keep "options on the table." After discussing tax incentives and the medical community for a few minutes, Lance Wheeler pushed back. 

Lance Wheeler: "What you just heard there is the classic politician dancing around the question. He just said that he will not sign the Pledge to not increase taxes on West Virginians but you should take his word for it. That's not the type of leadership West Virginia needs. West Virginia needs someone who will sign on paper with witnesses like Delegate Skaff has done that they will not increase taxes…I will stand by that Pledge and I urge Tom Takubo [to] sign that Pledge as well because it is necessary to tell the people of West Virginia that you will not be increasing taxes anymore." (19:56) 

Delegate Doug Skaff, the other candidate in the race is a Democrat and the Assistant Majority Whip in the House of Delegates. That makes the only candidate to not sign the Pledge Republican Dr. Tom Takubo. 

ATR commends Lance Wheeler and Delegate Doug Skaff for putting in writing their personal written commitment to oppose higher taxes by signing the Taxpayer Protection Pledge. We urge Dr. Tom Takubo to take tax hikes off the table by signing the Pledge as well because as Wheeler rightly points out, West Virginia doesn't have a revenue problem, it has a spending problem. 

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New Poll: Majority of Virginia Voters Oppose Medicaid Expansion

Posted by Paul Blair on Friday, April 25th, 2014, 12:28 PM PERMALINK

A new poll from Christopher Newport University's Center for Public Policy shows that a majority of Virginia voters oppose the Democrat-led effort to expand Medicaid in the Commonwealth. The state health program isn't the only thing voters have soured on; Democrat Governor Terry McAuliffe's approval rating now stands at 44 percent, down from a February poll that showed 53 percent of voters were optimistic about his governorship. 

At 53 percent, and by a 12 point margin, Virginians say that they oppose Medicaid expansion. A February survey showed general support for Medicaid expansion, 56 percent to 38 percent. That's a 15 point drop in support for expansion in two months. 

The February poll dug deeper by asking respondents if they would still support expansion if Virginia had to spend more state money to cover a decreased share of the program paid for by the federal government and only 41 percent said they would. Republicans in the legislature have continued to warn (in unison) that a reliance on the federal government for a 90 percent match for Medicaid funds is unreasonable, given Washington's debt and spending problem. ​​As the pollsters point out: "Republican skepticism concerning expansion has gotten through to voters.​"

“Democrats are losing the debate on expanding Medicaid in Virginia,” said Dr. Quentin Kidd, director of CNU's Wason Center for Public Policy. “This is mostly because they are  not convincing Independents that it will work. Voters seem to be moved by Republican  skepticism. Significantly, even in the Democratic-friendly territory of Northern Virginia, support leads opposition by only 2%.”
The ramifications of the Medicaid debate could be staggering if Democrats refuse to pass a clean budget that does not include Medicaid expansion. On July 1, the state government shuts down. Teachers and cops won't get paid. All state services stop. 78 percent of voters say they would blame Governor McAuliffe if that happened, which makes sense given his promise to shut the government down over Medicaid expansion last year
If there's anything to be extrapolated from the poll with U.S. Senate ramifications in Virginia, only 28 percent of respondents think the U.S. is headed in the right direction. That's a tough indicator if you're a U.S. Senator who was the 60th vote for Obamacare
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Gov. Terry McAuliffe needs to give up and let the ignorant Virginians not get Medicaid Expansion while paying for other states to have it and losing federal funding for healthcare as well as facing shutdowns of medical facilities as a result of rejecting it. The ignorance and stupidity of Republicans and so called Independents never ceases to amaze me.

Nevada's Education Initiative A Massive $750 Million Annual Tax Increase

Posted by Paul Blair on Monday, April 21st, 2014, 4:16 PM PERMALINK

This November, Nevada voters will have the ability to reject a teachers union-led effort to impose a new margin tax on all Nevada businesses that gross more than $1 million per year. Commonly referred to as the "Education Initiative," Question 3 on the ballot this year would impose a 2 percent margin tax on all businesses in Nevada. If approved, Nevada would jump "from a state with one of the lowest business tax burdens in the nation into the top five." 

Thomas Mitchell from Watchdog Nevada points out that, "When added to the current Modified Business Tax, which is a 1 percent tax on businesses’ payrolls, the 2 percent tax on gross receipts, because of limited deductions for expenses, would give Nevada an effective corporate income tax rate on profits of 15 percent — the highest in the West and nearly double California’s business tax rate of 8.8 percent."

According to an analysis conducted by Jeremy Aguero of Applied Analysis, "nearly every business analyzed bore significantly higher business tax liability under the proposed margin tax." The initiative would increase the average tax rate on Nevada businesses by 450 percent and would be four times larger than the Texas Franchise Tax, a commonly referred to example for precedent on this type of business tax. The analysis concludes that while a majority of Nevada businesses would not pay the tax because they do not meet the $1 million gross revenue threshold, businesses who employ a majority of Nevada's workers and account for most of the state's economic activity would bear increased liability. 

This will increase the cost of countless goods and services provided by Nevada businesses, including groceries, electricity, and health care. It would do this without any guaranteed improvement in the quality of education provided to Nevada public school students. 

That's because while money generated by the measure will be put into the "Distributive School Account," nothing would prevent the legislature from taking general fund education dollars and spending it on other budget priorities. The simple appropriations process could result in less education dollars, according to a 2012 District Court judgment, even after imposing hundreds of millions of dollars in higher taxes for an "Education Initiative." 

And of course, increasing money "for education" is in no way a guarantee that anyone's quality of education or learning will actually increase as well.

Visit to learn more. 

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ATR Applauds Virginia Speaker Bill Howell's Fight Against Medicaid Expansion

Posted by Paul Blair on Wednesday, April 9th, 2014, 12:33 PM PERMALINK

The budget showdown in Virginia continues as Democrats have refused to pass a clean budget that does not include Medicaid expansion. Though disagreements between the House and Senate regarding the actual budget are small, if not non-existent, the state Senate has insisted that Medicaid expansion be a part of this year's budget. 

Republicans control 68 out of 100 seats in the House of Delegates and under the leadership of House Speaker Bill Howell have rejected all efforts to expand Medicaid this year. ATR President Grover Norquist sent a letter to the Speaker today thanking him for his commitment in this important fight. 

Dear Speaker Howell,

On behalf of our supporters, millions of Virginia taxpayers, and taxpayer advocates, I write to thank you for your leadership in the fight against Obamacare’s Medicaid expansion in Virginia.

As a candidate for governor, Terry McAuliffe was asked about the use of Obamacare as a negotiation tactic during last year’s federal budget impasse. He opined, “These things should never be used as bargaining chips for our budget.” Under your leadership, Republicans have rightfully held Democrats in Richmond to this standard. I would urge continued strength on this matter.

Medicaid expansion in Virginia would be disastrous for several reasons. First, Medicaid expansion will not save taxpayers money.  Over the past thirty years, the program has grown by 1,683 percent. Adjusted for inflation, growth has still been roughly 700 percent, now comprising nearly a fourth of the state budget at $8.1 billion. Cost per recipient has also increased by roughly 6 percent per year to $6,500 per enrollee.

Medicaid will continue to be an ever-growing financial burden to the state. As far as the federal match, Congressman Paul Ryan’s warning is telling:

“The fastest thing that’s going to go when we’re cutting spending in Washington is a 100 or 90 percent match rate for Medicaid. There’s no way. It doesn’t matter if Republicans are running Congress or Democrats are running Congress. There’s no way we’re going to keep those match rates like that.” 

Second, the dramatic and unsustainable growth of Medicaid in Virginia crowds out funding for other budget priorities like transportation, education, and public safety. Adding hundreds of thousands of more enrollees to the state system will decrease the quality of care already provided to individuals enrolled in the program now. It will do this while forcing the legislature to cut costs in other areas of the budget to fund a program that provides sub-par quality of care to Virginians in need.

Third, the state Medicaid system needs serious reform. Though that task falls within the purview of the Medicaid Innovation and Reform Commission, or MIRC, the legislature would be wise to take the issue head on in the next 12-16 months. Reform should not be a precursor to expansion; it should be the only alternative Republicans are willing to accept. Ken Cuccinelli was a leader in exposing the waste, fraud, and abuse that runs rampant throughout Medicaid and an independent audit would be a good start and would potentially save Virginia taxpayers millions of dollars.

Virginia should begin to follow in the footsteps of other states that are beginning reform the way they provide health care through Medicaid. For example, pilot programs in Florida have saved the state roughly $100 million per year by enrolling poor and disabled patients in private health insurance.

We applaud your leadership and commitment to stop Medicaid expansion and look forward to working with you and the legislature going forward. If you have any questions, please contact state affairs manager Paul Blair at 202-785-0266 or by email at

Grover Norquist

President, Americans for Tax Reform

If Democrats insist on Obamacare's Medicaid expansion in Virginia and refuse to decouple it from the budget, the Virginia state government will shut down on July 1, something the governor is prepared to do

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A Tale of Two Governors: Florida's Charlie Crist vs. Rick Scott

Posted by Paul Blair on Monday, April 7th, 2014, 3:05 PM PERMALINK

This November, Florida will host one of the most-watched gubernatorial races of the year. Republican Governor Rick Scott is running for reelection against former Republican Governor, Independent and now Democrat Charlie Crist. Their records stand in stark contrast to each other, especially when comparing economic indicators over the four year terms of each governor. 

When Charlie Crist took office as governor in 2006, unemployment was at 3.5%, he had made a written commitment to oppose any and all efforts to raise taxes, and he was a Republican. When he left office, Florida had lost 825,000 jobs, unemployment had risen to 11.1%, he had signed more than $2 billion in higher taxes into law, he had embraced President Obama's Stimulus package, and he was no longer a Republican

When Rick Scott took office as governor in 2010, he inherited this mess. He governed as he promised too, however, cutting taxes, reining in spending, and bringing Florida back from the brink of disaster. As a result, unemployment has fallen to 6.2%, there was a $1.2 billion surplus this year, and he's signed over $2 billion in tax cuts into law. This includes 24 individual tax and fees cuts up through 2014 and $400 million in cuts this year

Both Rick Scott and Charlie Crist signed the Taxpayer Protection Pledge to Florida voters when they ran for governor in 2005 and 2009 respectively. Crist, however, broke his personal written commitment, by signing more than $2 billion in higher taxes and fees into law. 

This is the tale of two governors. One candidate breaks promises to taxpayers and has a horrible record to run on. The other candidate is Rick Scott. 

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ATR Opposes 92 Percent Tax on E-Cigarettes in Vermont

Posted by Paul Blair on Thursday, April 3rd, 2014, 4:32 PM PERMALINK

The Vermont House of Representatives recently passed a bill that would subject e-cigarettes to a new 92 percent tax and increase the excise tax on snuff. Estimates suggest that the tax on e-cigarettes will raise $500,000 for the state and the tax on snuff will generate another $700,000. This tax hike would hit Vermont small businesses hardest, especially those who have had to grapple with some of the 20 new and higher federal taxes imposed since President Obama took office.

Americans for Tax Reform opposes both tax increases and recently sent a letter to the Senate Finance Committee, where the bill is up for consideration. 

Dear Legislator,

I write today in opposition to a portion of House Bill 884, which would impose a 92 percent tax on e-cigarettes and increases the smokeless tobacco tax. Not only is this a massive tax increase that will hurt small businesses in Vermont, but to impose a massive tax on vapor products makes little sense from a health perspective as well.  

By imposing a 92 percent tax on e-cigarettes, some suggest that H.B. 884 will generate upwards of $500,000 for the state. Small businesses that are struggling to make ends meet will bear the burden of this tax increase. Local brick and mortar vapor stores will be hardest hit, given that this will increase the cost of these products up to $14. This is particularly troubling in a time of tepid economic growth and in light of the 20 new and higher federal taxes that have been imposed by Congress in the last few years.

This 92 percent tax will make Vermont extremely uncompetitive in e-cigarette pricing, leading to an increase in online purchasing and cross-border sales in New Hampshire. E-cigarettes will prove to be an extremely volatile source that costs in-state businesses tens of thousands of dollars in lost sales, resulting in even less revenue for the state government.

Taking aim at e-cigarettes works at cross-purposes with efforts to cut down on the harm associated with smoking. A number of studies have shown that electronic cigarettes stand to improve health and prevent disease. By choosing to “vape” e-cigs instead of smoking traditional tobacco, consumers get their nicotine fix without the combustion and smoke, which are responsible for many of the negative health effects of tobacco cigarettes.

With e-cigarettes, the free market has provided a solution to a problem that social engineers have not been able to address through stiff government regulations. The imposition of new taxes on innovative products that reduce smoking and people’s dependence on tobacco cigarettes is misguided and will impede proven harm reduction methods. It makes little sense in this fragile economy to impose hundreds of thousands of dollars in higher taxes on a product that provides consumers a viable and harmless alternative to traditional tobacco products.

H.B. 844 did not go far enough in cutting state spending. As such, I would urge you to remove the entire $1.2 million in tax hikes from the budget and re-examine the your budget priorities. For a state that prides itself on human services and health, it would be particularly unwise to use tax hikes to discourage the sale of products that will save the state millions of dollars in health care costs over the long run.

If you have any questions about ATR’s position on this issue, please contact state affairs manager Paul Blair at 202-785-0266 or by email at


Grover Norquist

President, Americans for Tax Reform

ATR encourages opponents of the bill to email legislators on the Finance Committee. 


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New York Legislature Cuts Taxes in $140 Billion Budget

Posted by Paul Blair on Wednesday, April 2nd, 2014, 9:00 AM PERMALINK

Late Monday night, lawmakers in Albany passed a $140 billion budget that included some noteworthy tax reform and relief. The budget unquestionably takes small steps to address New York's extremely uncompetitive business tax climate (50th in nation according to the Tax Foundation) though it does little to curb the state government's growth.

First, the death tax. As we have written, New York has one of the most onerous death taxes in the nation. Simply put, it's a bad idea to die in New York if you've amassed any sort of wealth. The Governor sought to raise the state asset exemption to the federal level and cut the tax from 16% to 10%. The legislature passed the first part, rejected the second. As Forbes's Ashlea Ebeling points out, there are problems with how the law is written but it's better than the status quo. 

Second, the state will send 2.8 million taxpayers about $1.5 billion in rebates equal to local property tax increases over the next two years if localities agree to a 2 percent property tax cap. While this isn't a tax cut, it does incentivize localities to curb and prioritize spending. Essentially the state will pay homeowners if local governments behave. At present rates, property owners are still subject to the 4th highest property tax collections in the nation. 

Not to ignore New York City renters, there are also about $85 million in available tax credits available based on the percentage of someone's income spent on rent. 

Next, the corporate tax rate will decrease from 7.1 percent to 6.5 percent, the lowest since 1968, and the manufacturer's income tax will go from 5.9 percent to 0. Republicans succeeded in ensuring that this tax cut applied statewide, instead of only parts of the state, as the Governor originally proposed.  

The utility tax surcharge is also phased out over three years, saving businesses and home rate payers about $600 million. This was a "temporary" tax signed into law in 2009 by Senate Democrats and Governor Patterson and Republicans rejected Governor Cuomo's attempts to extend the tax in his budget last year

Bill de Blasio got some of what he wanted too. While he couldn't convince legislators to let him raise the income tax in New York City, the budget includes $340 million for the expansion of pre-k programs, $300 million of which will go to the Big Apple. Charter school funding was also increased, up to $500 per pupil in the third year and making them eligible for pre-k funding. 

When you're ranked 50th in the nation for a business tax climate, there's only one direction you can go. And while this budget isn't a "grand slam" as Governor Andrew Cuomo called it, it certainly is more than a preservation of the status quo. There is some property tax relief, a reduction in the corporate income tax rate, utility bill relief, death tax reform, and a recognition that charter schools work. Republicans certainly succeeded in steering the budget in the right direction but there is still a lot of work to be done before New York can truly claim that it's "Open for Business." 

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