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Will Upton

Illinois Democrats Continue Push for "Millionaire" Tax on November Ballot

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Posted by Will Upton on Tuesday, October 21st, 2014, 5:00 AM PERMALINK


Mike Madigan, the Democrat Speaker of the Illinois House of Representatives, and Governor Pat Quinn continue their push for higher taxes via the Advisory Question: “Millionaire Tax Increase for Education Question.” In Illinois, Advisory Questions can be placed on the ballot to gauge public opinion on potential legislation – although the ballot result is non-binding. In this specific case, voters are being asked whether they would support the legislature enacting an additional three percent tax on income greater than $1 million for the purpose of granting school districts additional revenue. This past legislative session, a “Millionaire” Tax bill failed to gain the necessary votes in the Illinois legislature.

The ballot question reads, “Should the Illinois Constitution be amended to require that each school district receive additional revenue, based on their number of students, from an additional 3% tax on income greater than one million dollars?”

The Advisory Question comes on the heels of a hotly contested legislative session where a similar legislative measure was narrowly defeated – two other massive tax increases were also defeated. State spending interests are pushing the Question as a means of putting increased pressure on the legislature to enact the constitutional amendment during the 2015 legislative session.

When Illinois House Speaker Mike Madigan pushed the ballot measure back in May, the Illinois Policy Institute noted: “Illinois’ message to job-creators is increasingly clear: the state’s political leadership wants to punish you for achieving success. At a time when Indiana, Wisconsin, Florida and Texas are welcoming new entrants from over-taxed states with open arms, Madigan is doubling down on economic failure and destruction to feed Springfield’s insatiable appetite for a larger share of your wealth and capital.”

“After years of having a stranglehold on Illinois politics, Speaker Mike Madigan is looking desperate as he tries again to push his failing tax and spend agenda,” said Grover Norquist, president of Americans for Tax Reform. “After failing to garner the votes for a Millionaire Tax, a Progressive Income Tax, and an extension of the 2011 income tax hike during the legislative session, Illinois Democrats have thrown up this last ditch effort to continue pushing Illinois down the road to serfdom.”

 

Photo Credit: WBEZ

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Pres. Obama Tries to Rally Support for Maryland Democrats, Taxpayers Flee

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Posted by Will Upton on Monday, October 20th, 2014, 2:11 PM PERMALINK


This past Sunday, President Obama rallied support for embattled Democrat gubernatorial candidate and current Lt. Gov. Anthony Brown. While the President spoke, rally goers seemed to lose interest with some getting up and leaving. Reuters reported on Sunday: “President Barack Obama made a rare appearance on the campaign trail on Sunday with a rally to support the Democratic candidate for governor in Maryland, but early departures of crowd members while he spoke underscored his continuing unpopularity.”

The flight of rally goers from President Obama and Lt. Gov. Brown’s event is a fitting metaphor for the flight of taxpayers and businesses from the Chesapeake Bay State over the past 8 years of tax hikes and crushing regulations imposed by Gov. Martin O’Malley and Lt. Gov. Anthony Brown.

Since defeating Republican Gov. Bob Ehrlich in 2006, O’Malley and Brown have enacted 40 tax hikes that will cost Maryland taxpayers $20 billion by 2018 according to Change Maryland. Between 2007 and 2010, IRS data shows that nearly 31,000 residents have left the state. According to Gbenga Ajilore, writing in the Washington Post, of the 31,000 residents leaving the state, “…nearly 11,500 individuals in taxpayer households, went to Virginia. The net loss to Maryland — and Virginia’s gain — is $390 million in annual incomes. A surprising close second in attracting former Marylanders is North Carolina. Combined, that amounts to almost $700 million in annual incomes streaming down the Interstate 95 corridor.” North Carolina enacted major tax reform in 2013, making the state an even more attractive destination for refugees from high tax states like Maryland.

Much like the disgruntled rally goers on Sunday, Maryland’s millionaires fled the state after a 2008 law was signed by Gov. O’Malley enacting a new; higher rate for incomes over a million dollars. The result? Roughly a third of the state’s millionaires left. The Wall Street Journal notes: “One-third of the millionaires have disappeared from Maryland tax rolls. In 2008 roughly 3,000 million-dollar income tax returns were filed by the end of April. This year there were 2,000, which the state comptroller's office concedes is a "substantial decline." On those missing returns, the government collects 6.25% of nothing. Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year -- even at higher rates.”

Besides individual taxpayers fleeing the state, the radical tax and spend policies of O’Malley and Brown has caused a flight of businesses as well – resulting in thousands of jobs relocating outside of Maryland. Just one week ago, the Bechtel Corporation announced it would be moving a large chunk of jobs from Maryland to Virginia. Besides Bechtel, Maryland has seen operations from Northrop Grumman, Hilton Worldwide, SAIC, Volkswagen North America, Coventry, Constellation Energy, and Black & Decker either fold or leave the state. Change Maryland notes: “Since 2007… 6500 small businesses have left or shut down, the second-highest in the region, and just three Fortune 500 companies remain in the state. This is a sharp contrast to 24 large corporate headquarters in Virginia and 23 in Pennsylvania.”

When rally goers walked out on President Obama and Lt. Gov. Anthony Brown this past Sunday, they showed that Marylanders are increasingly turning their backs on the radical tax and spend policies of the Democrats in Maryland and in Washington, D.C.

 

Photo Credit: Edward Kimmel

 

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Novel Concept on Wisconsin Ballot: Using Gas Tax Revenue Only for Transportation

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Posted by Will Upton on Thursday, October 16th, 2014, 5:00 AM PERMALINK


Voters could put an end to the legislative abuse of raiding gas tax monies for non-transportation projects.

This November, Wisconsin taxpayers could decide to guarantee gas tax revenue goes only towards transportation projects via Question 1: “Creation of a Transportation Fund”. This legislatively referred constitutional amendment would legally dedicate revenues generated by use of the state transportation system, namely the state gas tax, to be used only for funding Wisconsin’s transportation system. The measure reads: “Shall section 9 (2) of article IV and section 11 of article VIII of the constitution be created to require that revenues generated by use of the state transportation system be deposited into a transportation fund administered by a department of transportation for the exclusive purpose of funding Wisconsin's transportation systems and to prohibit any transfers or lapses from this fund?"

State governments often raid state transportation funds to pay for other projects having nothing to do with roads or other transportation needs. Question 1 would constitutionally mandate that state gas tax revenue go towards projects within the purview of the Wisconsin Department of Transportation, ensuring that the revenue is not raided and the fund abused.

The ballot measure has received bipartisan support from Wisconsin’s Lt. Gov. Rebecca Kleefisch and a bevy of legislators. In addition to the support of numerous elected officials, Question 1 is being backed by many Wisconsin businesses, local chambers of commerce, and industry associations. Vote Yes for Transportation – the organization primarily backing a Yes vote on Question 1 – notes: “A winning "yes" vote simply requires that your gas tax and registration fee dollars remain in the transportation fund to be used to pay for Wisconsin's roads, public transit systems, ports, airports, rail and bicycle and pedestrian facilities.” The Wisconsin Taxpayers Alliance noted in 2013 that, “The change in revenue mix [shift to borrowing for transportation] coincided with the use of transportation fund revenues to help balance the general fund budget… In every year from 2002 to 2011, lawmakers transferred money from the transportation fund to the general fund – a 10 year total of more than $1.4 billion.”

Americans for Tax Reform president Grover Norquist noted, In a trick that is getting old and tired, politicians refuse to spend tax dollars raised through the gas tax on roads, then claim poverty, and promise  that 'if you only agree to another tax hike--this time the money will actually go for roads.' No surprise, it doesn't. Rinse. Repeat.He continued, This ballot measure ends this game in the state of Wisconsin. Forty-nine other states should follow suit.

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Nevada Voters Faced with Burdensome Business Tax on Nov. Ballot

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Posted by Will Upton on Wednesday, October 15th, 2014, 5:00 AM PERMALINK


Despite having no income tax, spending interests are pushing a new business tax despite opposition from taxpayers and even the AFL-CIO.

Question 3: “The Education Initiative” – Despite the innocuous sounding name, Nevada’s Question 3 would implement a new 2% "margin tax" on businesses operating in the state of Nevada. The revenue from the new tax would be granted to the state’s public schools. The Question was placed on the ballot via indirect initiative, meaning that a public petition was circulated and then sent to the legislature for approval to be placed on the ballot. The ballot question will read: “Shall the Nevada Revised Statutes be amended to create a 2% tax to be imposed on a margin of the gross revenue of entities doing business in Nevada whose total revenue for any taxable year exceeds $1 million, with the proceeds of the tax going to the State Distributive School Account to be apportioned among Nevada’s school districts and charter schools?”

If passed, the margins tax would result in a massive $750 million annual tax hike – a hike of 450% on Nevada businesses.

Originally, the initiative push for Question 3 was primarily backed by the Nevada AFL-CIO and the Nevada State Education Association. Despite initially backing the initiative, a revolt among AFL-CIO members forced the union to drop their support for Question 3. Danny Thompson, executive secretary treasurer for the Nevada AFL-CIO, issued a statement following the vote: “The vote today in opposition to the margins tax initiative is not a vote against education. It is a vote against a flawed initiative that will cost many of our members their jobs and raise the cost of living on Nevadans on a fixed income and on citizens that are still struggling to make ends meet after years of a terrible recession.”

The margin tax has received opposition from Nevada Gov. Brian Sandoval (R), several Democrat state legislators, a bevy of local business groups and chambers of commerce, as well as Jim Murren, CEO of MGM. The Coalition to Defeat the Margin Tax Initiative notes: “Overall, it would dump a massive $750 million increase on the costs of doing business for Nevada employers. That would severely damage our state’s already struggling economy and job market… Proponents claim that the $1 million gross revenues threshold protects small businesses. But in reality, the Margin Tax Initiative would hurt thousands of small businesses in Nevada that have total annual gross revenues of over $1 million but also have high overhead and very small profit margins – such as family-owned restaurants, medical clinics, daycare centers, repair shops, veterinarians, janitorial services, ranches, and farms.”

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JD

Businesses always expect people to get by on less...all in the name of profit...i think its there turn...


Tennessee Voters to Decide on Permanently Barring State Income Tax

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Posted by Will Upton on Tuesday, October 14th, 2014, 5:00 AM PERMALINK


A Constitutional Amendment on the November Ballot would bar Tennessee from ever enacting state or local income tax.

Amendment 3: “No State Income Tax Amendment” – Tennessee Amendment 3 is a legislatively referred ballot measure that would prohibit the state government and local governments from instituting a state or local income tax. The ballot measure reads: “ Shall Article II, Section 28 of the Constitution of Tennessee be amended by adding the following sentence at the end of the final substantive paragraph within the section: Notwithstanding the authority to tax privileges or any other authority set forth in this Constitution, the Legislature shall not levy, authorize or otherwise permit any state or local tax upon payroll or earned personal income or any state or local tax measured by payroll or earned personal income; however, nothing contained herein shall be construed as prohibiting any tax in effect on January 1, 2011, or adjustment of the rate of such tax.”

Currently, Tennessee is one of nine states without a state individual income tax – though the state does have what is called “The Hall Tax” which is a 6% tax on dividends. Despite a 1932 Tennessee Supreme Court ruling that struck down a state income tax, tax and spend proponents have argued that there are now legal grounds to institute an income tax in Tennessee. The passage of Amendment 3 would enshrine Tennessee’s position as a no-income tax state in the state constitution and require a much greater threshold to enact a state income tax.

State Senator Brian Kelsey, who sponsored the referendum, argues, “If this amendment passes, Tennessee will never face an income tax battle again… Not having a state income tax has already brought jobs to Tennessee, and clarifying this prohibition will help Tennessee become the number one state in the Southeast for high quality jobs.”  Writing in Forbes, Travis H. Brown of How Money Walks notes: “Tennessee is a significant player in the Heartland tax revolution, creating real opportunities for working families while Washington, D.C., sputters and stagnates on tax reform. Heartland states understand the need to compete, both on a national and international stage. A yes vote on Amendment 3 sends the clearest of messages: In order to stay competitive, Tennessee must eliminate the possibility of an income tax, today and tomorrow.”

“Tennessee and the other eight states without an income tax have outperformed the United States average in the categories of population growth, economic growth, and employment,” said Grover Norquist, president of Americans for Tax Reform. “By approving Amendment 3 this November,” added Norquist, “Tennessee voters can ensure that their state maintains this competitive advantage over other states, regardless of the partisan and ideological makeup of future state legislatures.”

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Marijuana Tax Hike Could Go Up in Smoke

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Posted by Will Upton on Friday, October 10th, 2014, 4:20 AM PERMALINK


The Washington state legislature hiked taxes on marijuana, will the voters buy it on the ballot?

Washington State has a non-binding Advisory Question on this year’s ballot, Advisory Question 8: “Concerns Marijuana Excise Tax”. Advisory Question 8 deals with the state’s recently legalized marijuana industry, specifically, the state legislature’s decision to essentially deem the industry non-agricultural – exposing consumers to a higher tax burden than they would have with other agricultural products. All-in-all, consumers will face a $24.9 million tax increase over the next decade. The ballot language reads: “The legislature eliminated, without a vote of the people, agricultural excise tax preferences for various aspects of the marijuana industry, costing an estimated $24,903,000 in the first ten years, for government spending. This tax increase should be:
[  ]  Repealed [  ]  Maintained”

The Advisory Question was placed on the ballot after the passage of Senate Bill 6505. The legislation redefined the marijuana industry, declaring it non-agricultural, exposing consumers to higher taxes.

In Washington State, Advisory Questions were once part of a broader provision that was frequently enacted via initiative that required a two-thirds supermajority of the legislature to raise taxes. Tax increases could also be placed on the ballot for voter approval. The Advisory Question was the only provision to survive the state Supreme Court striking down the statute requiring a two-thirds supermajority of the legislature to increase taxes in 2013. The grounds for the decision were based on the argument that preventing tax hikes somehow prevented the “adequate” funding of education.

Advisory Question 8 will be an interesting issue to watch as Washington State voters have had a long streak of opposing tax increases.

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Another Tax Revolt in Massachusetts?

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Posted by Will Upton on Thursday, October 9th, 2014, 5:00 AM PERMALINK


Massachusetts voters could scrap a new law that indexes the state gas tax to inflation.

Question 1: “Eliminating Gas Tax Indexing” – An initiated state statute, Question 1 could repeal a law passed this past legislative session indexing the Massachusetts state gas tax to inflation – eliminating a vote-less backdoor tax hike on taxpayers. The initiative reads “This proposed law would eliminate the requirement that the state’s gasoline tax, which was 24 cents per gallon as of September 2013, (1) be adjusted every year by the percentage change in the Consumer Price Index over the preceding year, but (2) not be adjusted below 21.5 cents per gallon.” Voters are told: “A YES VOTE would eliminate the requirement that the state’s gas tax be adjusted annually based on the Consumer Price Index. A NO VOTE would make no change in the laws regarding the gas tax.”

In addition to the ballot language, voters are also presented with an argument in favor of eliminating the gas tax indexing, as well as an argument against. The initiative has the support of several legislators and Jeffrey T. Kuhner (President of the Edmund Burke Institute for American Renewal) who notes in The Washington Times: “…the law is more than a corrupt attempt to hike taxes through the back door. It represents a fundamental assault on the very basis of our constitutional republic: No taxation without representation. This law does the very opposite. It enshrines the pernicious principle of taxation without representation. Democratic lawmakers have given themselves a free pass from voting for any future gas tax increases. This violates the basic precept of self-government – namely, that elected representatives can only raise the people’s taxes with their explicit consent through a vote in the legislature. The precedent is ominous. Today, it is gas taxes that will be hiked automatically. Tomorrow, it will be property, sales and income taxes. It is liberal corruption at its worst – a one-party regime that doesn’t even pretend to care about democratic accountability and government transparency.”

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The Kansas Tax Cuts Are Not to Blame for Revenue Woes

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Posted by Will Upton on Thursday, October 2nd, 2014, 1:28 PM PERMALINK


Several pundits, including the New York Times's Paul Krugman, have made hay over Kansas’ “revenue shortfall” this past fiscal year, chalking it up to the historic 2012 and 2013 Kansas tax cuts. At first glance, one might suppose them correct. Indeed taxes were cut and revenue did fall. But their 30,000 foot view passes over the more likely culprit behind the $338 million revenue drop – a change in the federal capital gains rate, caused by President Obama’s forced expiration of some of the Bush tax cuts.
 
The Kansas tax reforms did not cause the revenue shortfall. According to the Kansas Department of Revenue (KDOR), the shortfall stands at about $338 million for FY 2014, which ended on June 30. Now, $103 million of that—nearly a third--can be squarely blamed on the Division on the Budget increasing its revenue estimate just months before the end of the fiscal year. In the beginning of April 2014, the Division on the Budget increased their revenue estimate from $235 million to $338 million, citing strong economic indicators. The revision occurred right before Division on the Budget realized that their revenue estimates for the year were off beyond what could be considered a standard deviation. If you subtract the $103 million revenue error and use the original revenue projection, the shortfall is only $235 million.
 
As ATR has argued—and backed with CBO data—in the past, the shortfall is mainly due to a shift in capital gains payments by taxpayers into the prior fiscal year to avoid higher rates caused by the expiration of some of the Bush tax cuts (namely the increase in capital gains tax). Several states experienced surplus revenue in 2012-2013 (Virginia, Connecticut, and New Jersey) but are now experiencing deviations from initial revenue estimates or downward revisions in state revenue for 2013-2014. In Connecticut, for example, Democrat Gov. Dan Malloy’s budget director blamed their $400 million decrease in projected revenue on the capital gains shift prompted by the Fiscal Cliff.
 
Josh Barro in the New York Time’s “The Upshot” argues that if you reduce taxes you will get less revenue. No one is arguing with this assertion, at least in the short term. In fact, KDOR agrees with Barro: “The initial estimate for FY 2014 is $5.464 billion, which is $704.8 million, or 11.4 percent, below the newly revised FY 2013 figure. Factors influencing this forecast in addition to the state of the economy include the fully annualized impact of the new state income tax law that is effective in tax year 2013….” For Barro and other critics, the shortfall is proof-positive that Brownback’s tax cuts have wrecked the Kansas economy, except that there is, again, plenty of evidence that the error has more to do with federal tax policy than state tax policy.
 
As noted above, the shortfall actually stands at about $235 million for this past year. Duane Goossen, a former Kansas Budget Director who served under three governors (one Republican, two Democrats), has estimated that the capital gains shift possibly cost Kansas $147 million in tax revenue: “If Kansans had claimed another $3 billion of income for 2013 and that income had been taxed at the upper rate of 4.9 percent (the highest rate in place for tax year 2013), at most $147 million would have been added to state income tax collections in FY 2014… Even $147 million in additional tax receipts... would not have stemmed the tide of our state's $712 million revenue drop.” 
 
A critic of the tax cuts, Goossen uses a gimmick to make the capital gains shift look minor by comparing it to year-to-year revenue (a much larger drop but one anticipated and factored into the revenue estimate by the Division of the Budget) as opposed to the estimating error as it stands. If compared to the past year’s shortfall, the capital gains shift caused by President Obama’s intransigence makes up roughly 62.5% of the revenue shortfall (using Goossen’s $147 million estimate).
 
Additionally, $10 million of the revenue shortfall can be attributed to a drop in Kansas’s excise tax collections in the first quarter of 2014. This coincides with the negative GDP growth experienced by U.S. during the same period. Negative growth suppresses consumption and would throw off excise tax revenue estimates.
 
In the end, the Kansas tax cuts may account for a net revenue deviation of about $78 million – or 1.5% of Kansas’s total revenue collections, projected to be $5,986,481,000 this past year. Anything below a deviation of 2% is something most states that have not enacted major tax reform experience on an annual basis. As to worries of a future shortfall and lost revenues, most responsible legislators in Kansas will tell you that there needs to be some spending restraint in the state and it is their intention to enact said restraint, avoiding any further revenue woes. In short, the Kansas revenue shortfall is little more than hyperventilating scare tactics. Don’t’ believe the fever-pitch hype.
Photo Credit: 
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Wisconsin Democrats Don't Know Much about Taxes

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Posted by Will Upton on Wednesday, September 17th, 2014, 3:18 PM PERMALINK


Wisconsin Gov. Scott Walker (R) has come under fire from his Democrat challenger Mary Burke and the Wisconsin Democrat Party for rolling back the Wisconsin Earned Income Tax Credit (EITC). Despite passing historic tax cuts, Walker’s Democrat opponents insist that he has raised taxes on Wisconsin’s middle class. It appears that Democrat Mary Burke and her allies need to brush up on their tax policy, because they are flat out wrong. 

The thrust of the Wisconsin Democrat attack on Gov. Walker is that he cut the Wisconsin EITC while in 1986 President Ronald Reagan expanded the Federal EITC. Thus Gov. Walker raised taxes while President Reagan cut them. Unfortunately for Mary Burke and the Wisconsin Democrat Party, there is little truth in their attacks.

Here are the facts: In both instances, the EITC is refundable, meaning that even if a taxpayer is able to zero-out their personal income tax liability, they can still claim the credit and receive money from the state. Simply put, the EITC allows for the government to use the tax code to spend money. The U.S. Congress’s Joint Committee on Taxation scores all refundable tax credits as spending, not as tax cuts. Democrat candidate Mary Burke, in an ad attacking Gov. Walker, praised President Reagan for expanding the EITC, saying he had a “good idea about taxes.” Burke shows a complete lack of understanding of what the EITC is by tying it to taxes. Again, Congress’s own Joint Committee on Taxation scores the EITC as spending. The Wisconsin Democrat Party takes a similar line as Burke, again showing a complete lack of knowledge regarding the EITC and what it is actually scored as. Gov. Walker did not raise taxes on Wisconsin's middle class, nor was President Ronald Reagan's expansion of the EITC a tax cut for the middle class. The EITC is scored as spending, not a tax cut or a tax increase.

In reality, Gov. Walker – by rolling back the Wisconsin EITC – cut state spending reducing the state’s reliance on taxpayers. Since taking office in 2010, Gov. Walker has enacted over $2 billion in tax relief, while creating a more efficient and effective state government that is not burdensome to taxpayers or a hindrance to economic growth.

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ATR Releases List of 2014 State Pledge Signers Ahead of Elections in Tennessee

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Posted by Jorge Marin, Will Upton on Wednesday, August 6th, 2014, 4:11 PM PERMALINK


As the Tennessee primary approaches, Americans for Tax Reform has released a new list of state legislative and state-wide candidates seeking office who have signed the Taxpayer Protection Pledge. These candidates have shown a strong commitment to their state’s taxpayers by putting their convictions against new and/or higher taxes in writing. Please show your support at the ballot boxes on Thursday, August 7th.

The list for Tennessee is as follows:

 

Incumbents

 

  • Mae Beavers (S-17)
  • Jack Johnson (S-23
  • Bill Ketron (S-13)
  • Randy McNally (S-5)
  • Steve Southerland (S-1)
  • Harry Brooks (H-19)
  • Kevin Brooks (H-24)
  • Glen Casada (H-63)
  • Bill Dunn (H-16)
  • Jeremy Faison (H-11)
  • Steve Hall (H-18)
  • Beth Harwell (H-56)
  • Ryan Haynes (H-14)
  • Matthew Hill (H-7)
  • Curtis Johnson (H-68)
  • Kelly Keisling (H-38)
  • Jon Lundberg (H-1)
  • Steve McDaniel (H-72)
  • Steve McManus (H-96)
  • Dennis Powers (H-36)
  • Courtney Rogers (H-45)
  • Charles Sargent (H-61)
  • Tony Shipley (H-2)
  • Mike Sparks (H-49)
  • Terry Weaver (H-40)
  • Rick Womick (H-34)

 

Challengers

 

  • James R. “Jim” Finney (S-29)
  • Matt Swallows (S-15)
  • Dan Howell (H-22)
  • Tonya Miller (H-53)

 

Photo Credit: Corey Seeman

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