ATR Opposes 75 Percent Tax On E-Cigarettes in New Jersey
The New Jersey state Senate Health, Human Services, and Senior Citizens Committee recently passed a bill imposing a massive 75 percent tax on e-cigarettes sold in the state. The bill mirrors a proposal put forth by Governor Christie earlier this year, which we wrote about here. ATR opposes Senate Bill 1867 and all efforts to raise taxes in New Jersey.
At the end of April, state officials announced that the New Jersey budget shortfall grew to $807 million. Though that staggering number can be directly attributed to the higher taxes that took effect with last year's fiscal cliff deal, New Jersey's primary driver of long term budgetary issues is its addiction to overspending. This can only be addressed with reforms that deal with the costs of public employee pensions, health benefits, and debt service costs which comprise more than 94 percent of year-over-year budget growth. The state's pension system alone is $54 billion underfunded - an issue Governor Christie has called for additional reforms to address.
Raising taxes is a harmful distraction from these issues. Tax hikes on innovative products, like e-cigarettes, that save lives is a step in the wrong direction. This bill will chase business and revenue out of the state and onto the Internet, which is already a significant market for e-cigarette and vapor products. Small businesses, like convenience stores, stand to lose tens of thousands of dollars, which is particularly troubling in a time of tepid economic growth.
We urge the Senate Budget Committee to reject this bill and begin to face the facts on the pension, health benefits, and debt service cost crisis. Tax hikes won't make these issues go away.
Nevada State Senate Candidate Becky Harris Supports Higher Taxes
In her bid to secure the Republican nomination for Nevada's 9th state Senate district, Becky Harris refuses to take higher taxes off the table by signing the Taxpayer Protection Pledge. At a public forum, Nevada voters asked her to explain her position and her answers were telling...
Question: "Economics and taxes are very important to me. Have you signed the No Tax Pledge and if not, why?"
Becky Harris: "That's a great question! I have not signed the No Tax Pledge and I'm not going to sign the No Tax Pledge because I'm interested in looking at comprehensive tax reform."
First off, the Taxpayer Protection Pledge does not require opposition to revenue neutral tax reform; any tax increase must simply be tied to an offsetting tax cut of at least equal size. That information is available publicly here and is sent with a copy of the Pledge to every candidate for state and federal office. FactCheck.org has debunked this myth, summarizing that the pledge "explicitly allows elimination of any specific tax deduction or credit if matched dollar-for-dollar by an overall cut in rates."
But Becky didn't stop there.
Becky Harris: "I think it's a little disingenuous to sign a No New Tax Pledge… signing the Pledge kind of limits maneuverability and ability to look at a variety of different options that might be on the table."
For someone who takes pride in being a small business owner, this is concerning. Clearly Becky knows exactly what her plans are if she wins: raise the overall tax burden on hardworking Nevada taxpayers and small businesses. The only thing disingenuous in this race is Becky Harris's claim that the Pledge gets in the way of tax reform. The reality is that it gets in the way of her plan to grow government and raise taxes.
That's precisely why nearly every US House and Senate Republican has signed the Taxpayer Protection Pledge, including Budget Committee Chairman Paul Ryan and House Ways and Means Committee Chairman Dave Camp, two of the most powerful budget and tax-writing Republicans in Washington. Senator Dean Heller, Representative Mark Amodei, and Representative Joe Heck are also signers of the federal Pledge. The only people who use the "Pledge gets in the way of tax reform" line are people who admittedly want to raise taxes.
The Pledge doesn't get in the way of tax reform at the state level either. The most recent state to pass significant tax reform was North Carolina. The Governor, who is a Pledge signer, signed a historic tax reform package into law last summer, which cut the personal income tax, reduced the corporate income tax, and eliminated a number of credits and deductions along the way. The plan was Pledge-compliant, supported by ATR, and reduced the tax burden on taxpayers and small businesses in The Tar Heel State.
In her bid to fill the seat currently held by Democrat Justin Jones, Harris faces Republican Vick Gill, who has made a personal written commitment to oppose higher taxes by signing the Pledge.
"I applaud Vick Gill for signing the Taxpayer Protection Pledge. Gill has made the bold decision to put his anti-tax rhetoric in writing and voters know exactly where he stands on taxes now," said Grover Norquist, president of Americans for Tax Reform.
"The Pledge clearly and unambiguously endorses revenue-neutral tax reform and equally prohibits a net tax increase. To suggest otherwise reveals that your true motives include increasing the overall tax burden on Nevada taxpayers and small businesses. Becky Harris's willingness to raise taxes should concern voters in the 9th District. " continued Norquist.
Rhode Island Weighs Tax Reform
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.
Florida Governor Rick Scott Delivers on Promise, Cuts Taxes by $500 Million This Year
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.
“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.
ATR Launches Campaign Against Seminole County "Penny Tax"
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."
"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."
West Virginia's Lance Wheeler Challenges Dr. Tom Takubo to Sign Pledge in 17th State Senate District
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.
New Poll: Majority of Virginia Voters Oppose Medicaid Expansion
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."
Nevada's Education Initiative A Massive $750 Million Annual Tax Increase
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 www.stopthemargintax.com to learn more.
ATR Applauds Virginia Speaker Bill Howell's Fight Against Medicaid Expansion
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 email@example.com.
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.
A Tale of Two Governors: Florida's Charlie Crist vs. Rick Scott
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.