Paul Blair

One Year Anniversary of US Having Highest Corporate Tax Rate in Developed World


Posted by Paul Blair on Monday, April 1st, 2013, 12:17 PM PERMALINK


The distinction is bestowed upon us thanks to a federal and state integrated rate of 39.2 percent.

For perspective, the average rate in the developed world (OECD) is only 25 percent. Our six major trading partners – Canada, Mexico, the United Kingdom, Japan, Germany, and France – all have a lower corporate rate than we do. As a result, capital and jobs continue to flow overseas, rather than staying here to create jobs, increase wages, fund pensions, invest in new business, or grow nest eggs.

 

Thanks, Mr. President, for a number one ranking that no one is happy about.

Reducing the corporate tax rate is about more than remaining competitive with our major trading partners. Reducing the rate from 39.2 to the average rate of 25 percent would create more than 580,000 jobs annually over the next decade. According to the Milken Institute, such a policy shift would boost GDP by 2.2 percent. For President Obama, whose recovery has been the worst of any recovery since World War II, this should be easy. 

This is about more than economic growth for the national economy. American families would also benefit. According to the Heritage Foundation, A typical family of four's after-tax income would rise on average by $2,484 per year with a 25 percent corporate tax rate.

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As Governor O'Malley Comes to South Carolina, His Liberal Record Follows


Posted by Paul Blair on Friday, March 22nd, 2013, 2:24 PM PERMALINK


Maryland Governor Martin O’Malley will keynote a Democrat Party conference this weekend in Charleston, in the midst of his state legislature’s 90-day session.  The trip to South Carolina further fuels the narrative that he’s running for his party’s nomination for 2016. The visit also provides an opportunity to briefly compare the northern governor’s record to that of Governor Nikki Haley’s.

On Tax Reform/Relief:

Governor Haley: signed millions of dollars of tax relief into law, helping make South Carolina a more business-friendly state. She also pursued tax reform on a number of occasions. Most recently, as ATR noted, Haley used her State of the State address to call for eliminating the state’s top income tax bracket. Haley has also said that she would like to see the state’s corporate and individual income taxes phased out and eventually eliminated.

Governor O’Malley: has consistently straddled taxpayers in the Old Line state with higher bills and fees. In fact, in an exhaustive examination, ATR found that O’Malley raised taxes and fees a whopping 19 times, accounting for $2.2 billion dollars. O’Malley has raised taxes on everything from alcohol to smokeless tobacco to the infamous “millionaires tax”, which seems to have caused a mass exodus of the state’s most successful individuals. He most recently proposed an $830 million dollar gas tax hike ($3.4 billion over 5 years).

Pension Reform/State Employees:

Governor Haley: has been a stalwart when it comes to saving taxpayer dollars. Recently, she created a stir among state bureaucrats when she asked them to contribute a small amount more for their taxpayer-funded benefits. Furthermore, in the previous legislative session, the Governor signed a sweeping pension reform bill into law which, according to Moody’s Investor Service, would reduce the state’s long term unfunded pension liability by over $2 billion dollars.

Governor O’Malley: has presided over a system in Maryland which veers the state in the direction of a fiscal train wreck. According to a report by the Pew Center on the States, Maryland’s unfunded pension liability has increased from $11 billion to around $19 billion in the past few years, rendering any previous attempts at pension reform obsolete. The fund’s assets will cover only 65% of its obligations. In spite of this, O’Malley has presided over a retirement fund that pays exuberant fees to Wall Street investors (with questionable return) at the expense of hard-working taxpayers. 

Given the facts, one can see that the differences between the governors are more than just regional. Gov. Haley has consistently put the taxpayers first, whereas O’Malley has consistently viewed their interest as his lowest priority, using their hard earned dollars to fund higher and higher spending.

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Norquist Slams Tennessee Pole Attachment Fee


Posted by Paul Blair on Tuesday, March 5th, 2013, 2:13 PM PERMALINK


Americans for Tax Reform (ATR) President Grover Norquist sent a letter to the Tennessee Legislature last week in opposition to legislation that would nearly double the “pole attachment fee” that utilities charge private telecommunications companies to run lines that attach to electric poles.

The bills, HB 1111 and SB 1222, would nearly double the existing attachment fee from $17 to $33 per attachment. The national average is $7 per attachment; this would give Tennessee a rate nearly five times the national average. This would result in nearly $20 million being passed on to Tennessee families in the form of higher cable and internet bills.

The following is an excerpt from Norquist’s letter to the legislature:

I write in strong opposition to House Bill 1111 and Senate Bill 1222, which would increase the rate paid by cable and telecommunications providers to government-run utilities. The 'pole attachment fee,' paid in exchange to use utility companies’ electric poles to run cable and telecommunications lines, would increase to $33 per pole under this legislation. That is nearly five times the national average rate of $7 per pole, and would result in $20 million in additional fees being passed on directly to consumers.

“Tennessee’s pole attachment fee is already 2.5 times the national average, at $17 per pole. These bills would nearly double that already exorbitant cost, raising telecommunications costs and stunting private investment. The private companies shouldering this burden are already struggling to invest in Tennessee, and to create jobs and spur development across the state. HB 1111 and SB 1222 represent massive barriers to private sector led growth.

“During these difficult economic times, Tennessee families simply can’t the additional fees that will be passed on to consumers as a result of this legislation. With four years of tax increases coming out of Washington via Obamacare and other federal action, state government should give the people some relief from the burden of government, not increase its cost.

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Three Tennessee Republicans Try to Pickpocket Tennessee Tourists


Posted by Paul Blair on Monday, March 4th, 2013, 3:44 PM PERMALINK


Americans for Tax Reform has sent more than 25,000 pieces of direct mail into three Tennessee legislative districts in response to a legislative proposal in Nashville that would make booking hotels in Tennessee through online travel agents and agencies more expensive. ATR is working to make sure the sponsors of this dubious piece of legislation, Representative Steve McDaniel (R-Parkers Crossroads), Representative Art Swann (R-Blount County), and Senator Doug Overbey (R-Maryville), are all aware of the adverse impact this legislation will have on commerce and pocketbooks of Tennessee residents.

Tennessee tourism sustains nearly 180,000 jobs and generates more than $15 billion annually, making it one of the most important source of jobs the state. By raising taxes on companies who help families and tourists travel, these legislators are penalizing Tennessee taxpayers simply looking for the best deal possible.

According to the US Travel Association, tourism sustains nearly 3,000 jobs and generates more than $10.2 million in local tax revenues for Blount County, the county Rep. Swann represents. For Blount and Sevier counties, which Sen. Overbey represents, it’s 20,000 jobs and $2 billion in annual revenue. In fact, 50 percent of jobs in Sevier County are the result of tourism.

Rep. McDaniel represents parts of four counties in a rural part of the state, where tourism generates more than $50 million annually for those counties. Though McDaniel’s support for this tax hike comes as less of a surprise when one recalls his support for a state income tax and his vote for a Democrat Speaker of the Tennessee House.

Click each legislator’s name for a copy of the mail piece that was sent to their constituents: Rep. McDanielRep. SwannSen. Overbey

“Governor Bill Haslam said it best when he noted that ‘In Tennessee, tourism equals jobs.’ To make it more expensive for Tennessee travelers to book hotels with the best deals possible seems contradictory to the mission of growing this important sector of the state economy,” said Grover Norquist, president of Americans for Tax Reform. “After the wave of Obamacare tax increases that hit Tennessee residents on January, the last thing Tennessee taxpayers need are more job-killing and income-reducing tax increases at the state level. Support for this ill-advised tax increase demonstrates either total ignorance of, or willful disregard for – either of which is unacceptable – just how important tourism is to the state economy. Americans for Tax Reform will continue to educate Tennessee taxpayers on this issue and urge legislators to reject this tax increase.”

 

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SEQUESTER: Obama's "Ugly" Baby


Posted by Paul Blair on Friday, March 1st, 2013, 3:52 PM PERMALINK


As sequestration kicks in, ATR President Grover Norquist has an op-ed up at American Spectator discussing the only good idea President Obama has shared with Americans. He points out that the President, unfortunately, has spent a quite a bit of time denying “paternity” to it.

As Bob Woodward points out on page 326 of The Price of Politics, the sequester was the brainchild of the Obama White House in the days leading up to the final debt limit deal in August 2011. And despite “tough love” from the Chicago boys, Woodward is sticking with the facts.

Obama’s pride in the sequester was based on the fact he thought it was a way to avoid real spending cuts. Grover points out that the thinking went as follows:

Republicans in 2011 demanded $2.5 trillion in real spending reduction in return for giving the President a $2.5 trillion increase in his debt limit. For months the president whined and stamped his feet, demanding that the $2.5 trillion be made up of equal parts: real tax hikes now and phantom spending restraint someday. He had two reasons to think this stratagem would work. First, it worked in 1982 against Reagan. And second, it worked 8 years later in 1990 against George H.W. Bush. In 1982 and 1990 the tax hikes were real and spending went up rather than down—even from projected levels.

Grover points out that McConnell and Boehner weren’t dumb enough to fall for this trick, insisting on spending cuts alone.

The August deal was roughly a $1 trillion set of cuts in domestic discretionary spending and the establishment of a “super committee” that was charged to come up with the rest of the $2.5 trillion in borrowing authority the president was granted in the law. If the super committee couldn’t find the additional savings, the law guaranteed a sequester would take place in 2013 to make up the difference. The Democrats on the super committee wanted $1.6 trillion in higher taxes plus $400 billion in more “stimulus” spending. This was, not surprisingly, a no-go and the sequester was the backup already in law.

Obama mistakenly thought that the sequester, which equally cut from Pentagon expenses and non-defense spending, would force Republicans to vote for a tax hike to make sure they didn’t actually have to cut spending. He didn’t anticipate that the GOP would share a common belief with the American people that the government can afford to grow slower than the President planned.

So now Obama is reduced to the equivalent of denouncing his own baby as too ugly to present in public.

House and Senate Republicans have made it clear that they are open to alternative ways to save the same amount of money—$1.2 trillion over the decade. But there will be no tax hike and no loosening of the spending spigot.

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List of Virginia's 2013 Transportation Tax Hikes


Posted by Paul Blair on Monday, February 25th, 2013, 3:02 PM PERMALINK


Virginia’s 2013 state legislative session will be remembered for a lot of reasons. It was the year Republicans redistricted state senate districts to win more seats and then said just kidding, the year Republicans agreed to expand Medicaid in exchange for higher taxes (confused? Me too.), and most significantly, it was the year a Republican Governor worked with Democrats to raise taxes on Virginia families by $1.23 billion per year. Congratulations, Virginia.

In honor of a precedent set forth by Nancy Pelosi in Washington, the state legislature decided that they had to pass the 2013 Transportation Tax Hike (HB 2313) before they actually read it. Now that it sits on the Governor’s desk, we know what’s in the bill: a litany of higher taxes.

ATR’s State Affairs Manager Will Upton spent the weekend reviewing the bill and here are the results:

58.1-603: The State Sales Tax Hike: Bumps up the state rate from 4% to 4.3%.  Localities already get a 1% sales tax on top so what consumers will see is a jump from 5% to 5.3%. 

58.1-603.1: The Regional Sales Tax Hike: Additional sales tax in certain counties and cities. This section bumps the sales tax for Northern Virginia and Hampton Roads from 5.3% to an even 6%.  In Hampton Roads, that means $200 million in higher taxes annually and $350 million in Northern Virginia.

58.1-638.3 Explanation of Where .3% Sales Tax Hike Goes: 40% to light rail and mass transit projects.  

58.1-802.2: Northern Virginia Regional Property Tax Hike: Imposes a .25% tax on the sale of property in Northern Virginia

58.1-1742 Northern Virginia Hotel Tax: 3% hotel tax increase for Northern Virginia

58.1-2217 Replaces Gas Tax With Sales Tax on Gas: Moves the gas tax from a 17.5-cent tax per gallon to a 3.5% of the statewide average wholesale price of a gallon of self-serve unleaded regular gasoline for the applicable base period. Also replaces diesel fuel tax of 17.5-cents per gallon to a rate of 6% on the statewide average wholesale price of a gallon of self-serve diesel fuel, about a 5 cents per gallon tax hike.

Both the diesel and unleaded gas taxes have built in floors laid out in the bill to prevent the state from losing revenue.  

58.1-2249 Alternative Fuel Vehicle Tax: $100 registration tax on alternative fuel vehicles, an aptly rounded $66.6 million tax hike over 5 years.

58.1-2295: Hampton Roads Retail Dealer Tax: keeps in place the 2.1% tax on sale price charged by a distributer to fuels sold to a retail dealer in Hampton Roads.

58.1-2402: The Car Tax: increases the vehicle sales tax from 3% to 4% in 2013, 4.1% in 2014, 4.2% in 2015, and 4.3% in 2016.

58.1-2217. The We’ll Get You if Congress Doesn’t Tax: If Congress rejects the federal internet tax scheme, the tax on wholesale gasoline in 2015 will increase from 3.5% to 5.1%, without a provision to revert back if the law were to pass after 2015.This is a $1.2 billion tax hike over 5 years, according to the Governor’s estimates.

Taxpayers were stabbed in the back. Republican Bob McDonnell still has the chance to veto this monstrosity, though that is unlikely given that he has been a vocal cheerleader for HB 2313 for more than a month, even when the bill went from a $2.4 billion tax hike to a $6.1 billion tax hike.

Bob McDonnell campaigned against Democrat Creigh Deeds in 2009 saying that he unequivocally would “not raise taxes.” The lesson here? When a politician refuses to put in writing that he or she will oppose tax hikes, there is probably a reason. Thanks, Bob.

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Virginia House GOP Stabs Taxpayers in the Back -- Follows the Lead of Tax and Spend Democrats


Posted by Paul Blair on Friday, February 22nd, 2013, 4:52 PM PERMALINK


Today, the Virginia House of Delegates passed a $6.1 billion tax increase, when fully implemented over 5 years. The transportation plan, initially designed as a $2.4 billion tax increase exploded in size once negotiations began between the Senate and House earlier this week. Virginia taxpayers were never afforded the opportunity to read the legislation that included the following tax hikes:

  • Diesel tax hike from 17.5 cents per gallon to 6 percent tax on wholesale diesel, roughly a 5 cent per gallon increase
  • Sales tax hike from 5 to 5.3 percent
  • Additional sales tax hike of .7 percent in Hampton Roads and Northern Virginia
  • 3 percent Northern Virginia hotel tax
  • Car tax hike from 3 percent to 4 percent in 2013, 4.1 percent in 2014, 4.2 percent in 2015, and 4.3 percent in 2016
  • If Congress rejects the federal internet tax scheme, the tax on wholesale gasoline in 2015 will increase from 3.5 percent to 5.1 percent, without a provision to revert back if the law were to pass after 2015

Only three Taxpayer Protection Pledge signers broke their Pledge to their constituents to oppose any and all efforts to increase taxes. They were Del. Dave Albo, Del. Kirk Cox, and Del. Randy Minchew. 

This was not a  compromise. It was a surrender of principle and policy. There were no spending cuts or tough choices. This was Bob McDonnell and some Republican Delegates and Senators, in league with almost all Democrats, betraying Virginia taxpayers . McDonnell took the lead on a $2.4 billion tax increase and oversaw its transformation into a $6 billion tax increase. When Virginians look at their thinner, lighter wallets, they have a handful of lawmakers to blame: Speaker Bill Howell, Sen. Frank Wagner, Sen. John Watkins, Del. Chris Jones, and now, Governor Bob McDonnell,” said Grover Norquist, President of Americans for Tax Reform.

“In 2009, Bob McDonnell said he would not raise taxes. Now he says he will sign a very large tax hike. Perhaps that is why he refused to put that promise in writing by signing the Taxpayer Protection Pledge to oppose higher taxes on Virginia citizens. Politicians who refuse to sign the pledge will eventually, when asked, raise taxes.”

[Unlike Prior to the Bill's Passage, You Can Now Read the Bill Here]

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