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Paul Blair

Norquist: Defeat of SB 1355 Transportation Bill is a Victory for Virginia Taxpayers


Posted by Paul Blair on Tuesday, February 5th, 2013, 7:20 PM PERMALINK


President of Americans for Tax Reform Grover Norquist today released the following statement after the Virginia state senate recommitted the Governor’s “Road to the Future” transportation plan back to committee:

“The defeat of SB 1355 demonstrates that the state senate understands that the Governor’s transportation proposal was not the best solution to Virginia’s transportation needs. Although the Senate will vote on the House version of the bill in the coming weeks, what is clear is that the legislature remains divided on whether a massive tax hike is the best solution to paying for new transportation costs.”

“HB 2313 remains as an unacceptable solution to Virginia’s transportation crisis. It contains a $607 million sales tax hike, more than $500 million in car taxes, and an internet tax scheme. In the last three years, Virginia has run a surplus of $1.4 billion. Less than $21 million of that went to transportation, a miniscule 1.5%. Now is the time to prioritize currently collected and new growth revenue to transportation, not to raise taxes.”

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State Senator Frank Wagner: Flip Flopped on the Travel Agency Tax


Posted by Paul Blair on Tuesday, February 5th, 2013, 2:42 PM PERMALINK


Americans for Tax Reform has sent more than 11,000 pieces of direct mail into State Senator Frank Wagner’s district asking constituents to call Senator Wagner demanding answers. Despite the fact that in 2011, Wagner voted NO on Democrat Senator Mary Margaret Whipple’s online travel agency tax, this session he was the chief sponsor of that same bill.

Virginia Beach receives more than $1 billion annually from domestic travelers, supporting nearly 12,000 travel-related jobs. Wagner’s targeted tax would increase the costs of using service providers who help travelers find the best deals on hotels, disproportionately harming small businesses and budget-conscious travelers.

A copy of the mail piece can be seen here.

“As a representative of Virginia Beach and Norfolk, Senator Frank Wagner should know better than to target the tourism industry for higher taxes. Wagner’s efforts to raise taxes have gotten out of control,” said Grover Norquist, president of Americans for Tax Reform. “Voters deserve to know why Wagner voted no on the travel agency tax when it was carried by a Northern Virginia Democrat and then decided to carry the bill during the 2013 session. Wagner is not representing the interests of budget-conscious Virginia tourists and should be held accountable for his most recent flip-flop.”

[PDF of Press Release]

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Norquist: House Passage of 2313 Emblematic of Legislature's Refusal to Prioritize Transportation


Posted by Paul Blair on Tuesday, February 5th, 2013, 12:24 PM PERMALINK


President of Americans for Tax Reform Grover Norquist today released the following statement after the Virginia House of Delegates passed the Governor’s “Road to the Future” transportation plan:

“House passage of HB 2313 demonstrates that the Virginia state legislature just doesn’t get it. Richmond doesn’t have a revenue problem; it has a problem prioritizing spending. No one denies that Virginia has a transportation crisis. Instead of making transportation a priority out of currently collected revenue, however, Virginia Democrats and a select number of Republicans demanded higher taxes instead. A $607 million sales tax hike, more than $600 million in car taxes, and an internet tax scheme are not the solution to Virginia’s transportation needs.”

“In the last three years, Virginia has run a surplus of $1.4 billion. Less than $21 million of that went to transportation, a miniscule 1.5%. It’s time for Virginia Republicans to adopt a conservative approach to solving Virginia’s transportation needs. Eliminate the fees, lower the sales tax hike, and use more general fund revenue to pay for maintenance and new project costs.”

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New Travel Agency Taxes Damage Tourism and Are Illegal


Posted by Paul Blair on Monday, February 4th, 2013, 11:47 AM PERMALINK


As Digital Liberty’s Katie McAuliffe has explained, the internet is the new frontier for higher taxes. Although federal legislation to impose a national internet tax scheme on states and businesses failed to pass in the 112th Congress, many states took notice of the potential for new revenue. Some states are even going as far as imposing their own internet tax schemes.

Tennessee, Indiana, Texas, Pennsylvania, Virginia, New Mexico, Connecticut, Oregon, Utah, and Massachusetts are among the “give me more” legislatures looking to grow state coffers. The focus for these states is online hotel booking agents.

As Katie points out,

Hotels offer a room rate to travel agents, which already has the hotel occupancy tax included in the room rate.  They charge the buyer a service fee for locating the room, which is separate from the room rate.  It is a fee for the service of finding the room and this fee is taxed under income tax laws because it goes to the travel agents income.

The Online Travel Agent or Store Front Travel Agent’s facilitation of locating a room is a service and not the same as the room provide by the hotel where the traveler will be staying.  Attempting to expand the hotel occupancy tax would treat the service provider in the same way as a hotel for tax purposes, obscuring the difference between a hotel room and a service. 

Even more, such efforts are illegal. The 1998 Internet Freedom Act prohibits taxes applied only to internet based businesses and not their counterparts.

When laws of this nature have come before the courts, 90% of the time they are struck down because a service charge is different from the rate charged for the room and therefore not subject to occupancy tax.  Occupancy taxes are already paid for in full on the amount received by a hotel when a traveler purchases a room from a travel agent.

What’s the big deal, you ask? Katie’s got the answer to that as well:

People booking for large groups, an office retreat, a school trip, or a large family’s vacation, would feel the burdens of this tax increase.  They may choose a different state to visit or shorten their stay.  The overall cost would increase for a large group by perhaps hundreds of dollars.

This is another faulty attempt by revenue hungry and budgeting shy officials to tax innovative businesses.  The likelihood of this tax backfiring and causing a state to lose money in tourism and travel agent business is high; much higher than the revenue that could be gleaned from this taxation attempt.

This innovative tax scheme has been proposed by both Republican-run states and Democrat ones. Perhaps instead of considering new (illegal in many cases) taxes, legislatures should look within their own budgets to cut back in the same manner that millions of Americans have over the last 4 years.

What are your thoughts? Should tourists bear the burden of state legislatures unwilling to cut back on spending, even though millions of Americans have done just that in the past 4 years?

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ATR Supports Virginia HB1313


Posted by Paul Blair on Wednesday, January 30th, 2013, 1:56 PM PERMALINK


Americans for Tax Reform supports Virginia HB 1313, legislation authored by Delegate Bob Marshall that would prevent two of the twenty tax increases in Obamacare from hitting Virginia taxpayers. We urge Virginia lawmakers to pass the legislation during the 2013 session. 

HB 1313 would amend the Code of Virginia to de-conform Virginia tax rules from the Patient Protection and Affordable Care Act (Obamacare). Virginians would then be able to deduct from their state returns the increased costs that result from the new threshold under which medical expenses cannot be reimbursed. Obamacare raised this threshold from 7.5% to 10% of adjusted gross income, costing US taxpayers $15.2 billion over 10 years.

Additionally, HB 1313 would protect Virginians from the heightened costs incurred due to Obamacare’s reduction in the allowance of tax deductible contributions to flex spending accounts. Obamacare caps such tax deductible contributions at only $2,500 – prior to Obamacare, taxpayers could make unlimited contributions to their flex accounts under federal law. This provision in Obamacare is particularly detrimental to families with special needs kids, who have traditionally funded their children’s relatively high education costs through these tax deductible accounts.  

HB 1313 would simply preserve present tax rules on Virginia state returns, thereby preventing two tax increases that would have otherwise taken effect with the implementation of Obamacare. While much of the Obamacare’s tax changes are out of legislators’ hands, HB 1313 represents an opportunity for state lawmakers to help cushion the blow of this massive federal tax increase, over 80% of which was scheduled to begin taking effect this year.  

HB 1313 is an important and innovative step forward in curbing federal overreach and job-killing tax increases signed into law by President Obama.  As such, we urge Virginia legislators stand up for their constituents by supporting and voting for HB 1313.

[PDF of Letter from Grover Norquist to Virginia Legislators]

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Anna Bryson Signs the Taxpayer Protection Pledge


Posted by Paul Blair on Wednesday, January 30th, 2013, 12:16 PM PERMALINK


School Board Trustee Anna Bryson has signed the Taxpayer Protection Pledge in her bid for California’s 73rd Assembly seat. The Pledge, sponsored by Americans for Tax Reform, commits signers to “oppose and vote against any and all efforts to increase taxes." 

Bryson, a 2014 candidate, is the first candidate in the race to sign the Taxpayer Protection Pledge.  In her time as a School Board Trustee for the Capistrano Unified Schoold District in Orange County, Bryson has ended prior deficit spending habits in the district and balanced the district budget without raising taxes. In addition, Bryson was successful in reducing the size of the district administration and helped push for greater transparency by posting the district's checkbook and budget online. Her actions exemplify the type of leadership Sacramento desperately needs. 

ATR has offered the Pledge to all candidates for federal office since 1987. In the 113th Congress, 39 U.S. Senators and 219 members of the U.S. House of Representatives have signed the Pledge. Additionally, thirteen governors and approximately 1,100 state legislators have signed the Pledge.

“I want to congratulate Anna Bryson for taking the Taxpayer Protection Pledge. Californians already contend with one of the highest state and local tax burdens in the nation and it is clear that the problem in Sacramento is overspending. For decades, politicians in Sacramento increased spending at a rate far beyond that of population growth and inflation,” said Grover Norquist, president of ATR.

“With onerously high tax rates forcing individuals, families, and employers out of the state in droves, it’s time that lawmakers reject more job-killing tax increases. By signing the Pledge, Anna Bryson demonstrates that she understands the problems of hard-working taxpayers of California. I challenge all candidates for office in California to make the same commitment to taxpayers by signing the Taxpayer Protection Pledge today,” Norquist continued.

[PDF of Press Release]

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Governor Bob McDonnell's Transportation Plan: A $2.4 Billion Tax Hike on Virginians


Posted by Paul Blair on Wednesday, January 23rd, 2013, 2:29 PM PERMALINK


 

Republican Governor McDonnell’s “Road to the Future” gets one thing right: it begins to prioritize transportation costs as a core government expenditure. Unfortunately, it does so by raising the net taxes paid by Virginians to fund new projects.

Americans for Tax Reform designed an infographic illustration of the plan, which can be seen at www.atr.org/therealroad.

Although the plan eliminates the state gas tax, it overcompensates with new revenue generated by a 16 percent increase in the state sales tax, a $15 annual vehicle registration “fee” hike, a $100 alternative vehicle registration “fee” hike, and pre-emptively opts Virginia into a national internet tax scheme. It is a far cry from a fiscally conservative approach to state spending.

As it stands now, the plan is a violation of the Pledge to Virginians many state legislators took to oppose any and all taxes.

The bill has been filed in the House Finance Committee (H.B. 2313) and Senate Transportation Committee (S. B. 1355).

“In a state controlled by Republicans, this is the absolute wrong approach on a path to sustainable transportation spending. When legislators demand higher taxes in exchange for prioritizing transportation costs, they are demonstrating that transportation is their lowest budget priority,” said Grover Norquist, President of Americans for Tax Reform.

“Virginians have rejected this kind of approach before. When voters were asked in 2002 whether they thought that transportation should be paid for with existing state revenue or with higher taxes, they overwhelming rejected Gov. Warner’s call for higher taxes. Virginia does not have a revenue problem. It has a problem prioritizing spending.”

[PDF of Press Release]

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Governor McDonnell's REAL Road to the Future


Posted by Paul Blair on Tuesday, January 22nd, 2013, 12:26 PM PERMALINK


Virginia Governor Bob McDonnell's new transportation plan, "The Road to the Future," is complicated and seemingly contradictory ("revenue neutral" yet it increases spending by billions.) 

Americans for Tax Reform has simplified the plan into an easy-to-understand infographic. If you are a blogger, feel free to put this infographic on your site and, if you're on Twitter or Facebook, we invite you to hit the 'share' and 'tweet' buttons above. 

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ATR Opposes Virginia Governor McDonnell's Current Transportation Plan


Posted by Paul Blair on Thursday, January 17th, 2013, 6:46 AM PERMALINK


As the bill stands now, Governor Bob McDonnell’s proposed 2013 “Road to the Future” transportation plan is a massive $1.22 billion tax increase that should be defeated by the General Assembly. For legislators who have signed the Taxpayer Protection Pledge, supporting all of the measures advocated in this plan would be a clear violation of the promise made to Virginia taxpayers to oppose any and all efforts to increase taxes unless it is significantly improved.

The governor’s prior attempts to prioritize funding for transportation without raising taxes were defeated by Democrats and a select group of Republican state senators whose last concern is the transportation crisis.

In the past, this wing has required that in exchange for prioritizing transportation as budget expenditure, taxes had to go up. Legislators who demand that more of Virginia’s current revenue be directed to transportation in exchange for higher taxes demonstrate that their lowest budget priority is transportation.

When members of the General Assembly say they are unable to prioritize state spending for transportation, they are referencing opposition from both Democrats and Republicans like Senators Frank Wagner, John Watkins, and Tommy Norment. These are the culprits that have put Virginia in the transportation crisis it is currently enduring.

The Governor’s current plan is designed to win over this wing of the General Assembly. According to the Governor’s own numbers, replacing the gas tax with a 16% higher sales and use tax is a $607 million tax increase.  Increasing vehicle registration and alternative vehicle fees is a $614 million tax increase.

Even worse, if the Governor successfully lobbies Congress to implement a national internet tax by passing the Market Place Equity Act, taxes rise by $1.2 billion over 5 years.

This year, as states like Louisiana and North Carolina move in the direction of pro-growth tax reform that lessens the burden of government on taxpayers, Virginia should not take the lead on an alternative course by pursuing massive tax hikes. 

Supporters of the governor’s original goals – to prioritize transportation funding as part of currently collected and new growth revenue – should reject the tax hikes in the proposed plan.

Supporting the Governor’s proposed plan otherwise is a massive tax increase that Virginia taxpayers cannot afford.

[PDF of Letter to General Assembly]

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Governor Bob McDonnell's Transportation Plan


Posted by Paul Blair on Tuesday, January 15th, 2013, 5:16 PM PERMALINK


Governor Bob McDonnell (R-VA) has taken a bold step in working to fund Virginia’s transportation crisis.  It is clear that he has an interest in leaving a lasting legacy as a governor who prioritized transportation. Unfortunately, his “Road to the Future” is paved with a number of flawed solutions.

First, the good. The plan, which can be seen here, gets one thing right. It begins to prioritize transportation as a core state expenditure. By changing the share of revenue collected from the sales and use tax that is designated to maintenance costs and the Transportation Trust Fund, McDonnell makes clear that transportation deserves a bigger piece of the budget pie.

“Transportation currently receives 0.5 cent of the SUT, and the governor proposes to phase in this share to 0.75 cent over five years.”

According to McDonnell’s own analysis, this will result in more than $811 million over the next 5 years for transportation out of currently collected revenue.

Option 2014 2015 2016 2017 2018 5-Year Total
Increase Existing SUT commitment from .05% to .75% over 5 years $49.0 $101.7 $158.4 $219.2 $283.2 $811.5

Next, the tax cut. The Governor proposes eliminating the state 17.5 cents/gallon tax on gasoline. This is a tax cut of about $3.5 billion tax cut over 5 years.

Policy 2014 2015 2016 2017 2018 5-Year Total
Eliminate 17.5 cents/gallon tax on gas ($684.1) ($694) ($703.7) ($708.8) ($713.8) ($3,504.4)

Now, the bad. Unfortunately, this tax cut is replaced by a 16% increase in the state sales and use tax. The Governor’s plan replaces the current gas tax with a .8 cent increase in the sales and use tax. The net tax increase is outlined in the Governor’s own projections:

Option 2014 2015 2016 2017 2018 5-Year Total
Replace 17.5 /gallon tax on gas with .8% NGF SUT increase $24.6 $109.3 $131.8 $158.4 $182.9 $607.0

The higher sales and use tax increase is projected to bring in $4.1 billion in additional revenue over 5 years. Subtract current gas tax revenue projections from the increase in projected SUT revenue and you get a $607 million net tax hike.

Now, more bad. The “Road to the Future” includes a $15 increase in vehicle registration fees. This is a 5-year car tax increase of $547 million.

Option 2014 2015 2016 2017 2018 5-Year Total
$15 Increase in Registration Fees $109.4 $109.4 $109.4 $109.4 $109.4 $547.0

Did you recently purchase an alternative fuel vehicle in Virginia? Sorry, says McDonnell. $66.6 million in higher taxes for you.

Option 2014 2015 2016 2017 2018 5-Year Total
$100 Alternative Fuel Vehicle Fee $10.2 $11.4 $13.0 $15.0 $17.0 $66.6

Next, the horrible. Republican Governor Bob McDonnell is lobbying the 113th Congress to pass the Market Place Equity Act, the internet sales tax.

Over at Digital Liberty, Katie McAuliffe has an excellent explanation why the flawed federal legislation is a confusing, slippery slope that expands state tax authority and threatens privacy.

Creating competition among states for higher taxes and placing greater burdens on businesses to comply with thousands of new regulations is a huge step in the wrong direction. Passage of this federal legislation would result in over $1.1 billion in higher taxes on Virginia consumers.

Option 2014 2015 2016 2017 2018 5-Year Total
Market Place Equity - Transportation $175.7 $199.1 $207.0 $214.8 $222.2 $1,018.8
Market Place Equity - Local Trans $23.7 $26.9 $28.0 $29.1 $30.1 $137.8

In conclusion, the proposed plan is a massive $1.22 billion tax increase. With the inclusion of the federal Market Place Equity Act, Virginia taxes will rise by $2.38 billion over 5 years.

ATR is encouraging legislators to amend the “Road to the Future” so that it is not a net tax increase and pass a plan that shifts a greater share of sales and use tax revenue to transportation costs and projects. If transportation is a priority, it's time to allocate current funds in a way that reflects that. 

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