Proposed Tax Hikes in Kansas Won't Solve Overspending Problem; Will Hurt Small Businesses

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Posted by Will Upton on Monday, January 26th, 2015, 10:55 AM PERMALINK


As a part of his 2015 Kansas budget, Gov. Sam Brownback has proposed tax increases on alcohol and tobacco products. These tax increases would have a detrimental impact on  working class consumers and small businesses alike. In a letter to the Kansas legislature, Americans for Tax Reform president Grover Norquist noted:

Increasing the sate cigarette tax from 79-cents to $2.29 per pack represents a 190% increase in the tax rate on mostly middle and lower class consumers. Increasing the state tax on liquor from 8% to 12% would have a detrimental impact on many of Kansas’s small businesses who are reliant on liquor revenue – small businesses that the 2012 and 2013 tax reform legislation was designed to help and grow... A pack-a-day smoker would end up paying an extra $547.50 in taxes a year. Kansans living along the Missouri border may opt to avoid the tax altogether by purchasing their tobacco products in Missouri – where the tax would be lower. If consumers flock to businesses across state lines, they may make other purchases while shopping for tobacco – hurting the bottom lines of Kansas retailers.

In addition to the burdensome costs to retailers and consumers, sin taxes such as those proposed by Gov. Brownback are traditionally a declining source of revenue. Kansas has an overspending problem and it can be solved not by hiking taxes but by eliminating government waste and reducing spending. The ATR letter to the Kansas legislature notes:

States should aim to increase spending at the rate of inflation and population growth. Using those metrics Kansas has over-spent by about $12 billion between 2000 and 2009. That’s an over one-billion-dollars-per-year overspending problem. That data point alone should put to rest any claims that there is no room to cut from the state budget.

To read the full letter, click here.

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As Senator, Obama Voted to Make 529 College Savings Plans Permanent

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Posted by John Kartch, Ryan Ellis on Monday, January 26th, 2015, 10:21 AM PERMALINK


On August 3, 2006, then-Senator Barack Obama voted to make the current tax treatment of 529 college savings plans permanent.

President Obama’s recently proposed tax plan, however, reverses this vote on 529 plans.

The vote on H.R. 4 — the Pension Protection Act of 2006 — took place in the second session of the 109th Congress, vote #230.

H.R. 4 made permanent the 529 plan expansion in the otherwise temporary 2001 Bush tax cut package (the Economic Growth and Tax Relief Reconciliation Act of 2001 — EGTRRA). The vote for H.R. 4 enshrined into permanent law the current tax-free growth of these college savings plans if used for tuition and fees. The 529 provision was in Section 1304 of the legislation.

The Obama administration has now proposed raising taxes on 529 plans, reversing the vote Senator Obama took in 2006. The administration now criticizes 529 plans as “upside down,” and “ineffective."

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Jeffrey L. Mcdonald

He voted yes to the 529 plan when he was in the Senate and he didn't know he would become president. It was a good plan then, he had 2 young girls and it was a good way to save for college, just like the millions of other Americans who put money in the plan also. Now that he's president he no longer has to worry about money because the American people will pay for his kids to go to college. If that doesn't show his thought are only about his family not the families of will have to save or get student loans for their kids to go to college. So he's saying I got mine screw the rest of you. obama is such a liar he forgot that he voted yes to the 529 plan as a senator and now it's ok to end the plan. He's going to say you can still use the plan if you want to but it's going to be taxed. What sense would it do to use it when you can put money in a plan where you can draw intrest.Just one more hit on the lower and middle class.

EGO

Shocking...the man that also said marriage was between a man and a woman.

government watchdog

they were good for all of the people and they were promised by the government. Only Obama ignores former promises. He is a liar and a racist.


Delay of Water Settlements Needlessly Costing Taxpayers


Posted by Ryan Ellis on Saturday, January 24th, 2015, 9:38 PM PERMALINK


One of the main powers and responsibilities of Congress is to spend money. Often times this authority is abused and taxpayers end up burdened by the costs of wasteful spending on pet projects (earmarks) and needless programs that otherwise wouldn’t be approved. However, sometimes there are issues that are misrepresented.  Another responsibility of Congress is to finalize water rights settlements that have already been negotiated by Congress. This is an issue that that hasn’t gotten much attention but is costing taxpayers.  A Republican-controlled Congress may be able to move these settlements forward.

As Congress makes progress in taking care of these settlements, some may want to characterize these as earmarks.  While some have said these settlement agreements are tantamount to earmarks, that is not simply the case. The Taxpayers Protection Alliance (TPA) is fully aware of what constitutes an earmark in Congress and these are not even close. TPA has been exposing earmarks for years.  The latest expose of earmarks by TPA was the 293 earmarks hidden in the Defense appropriations bill worth more than $13 billion (click here for a full list).  The settlements reached by Congress regarding these water and land disputes are not earmarks and shouldn’t classified as such.

Indian water rights settlements are agreements that resolve certain legal claims that Native American tribes have with the United States government. The settlements that are entered into are ultimately agreed upon by Congress and various federal agencies with jurisdiction on these matters. The stated agreements “fulfill the federal government’s obligation to manage water resources held in trust on behalf of Native American tribes.”

The cost of this settlement process as opposed to the cost of protracted litigation is an easy choice for Congress and the other parties involved. During a hearing on this issue in March of 2012, former Sen. Daniel Akaka (D-Hawaii), then-Chairman of the Committee on Indian Affairs, noted in his opening remarks to the Committee that:

“Congress has approved over two-dozen water settlements in the past 35 years. Last Congress, we enacted legislation that settled the water rights for seven tribal nations. Collectively, these seven tribes spent nearly a century litigating their water rights in court before having their settlements approved by Congress. Can you imagine this? 

In determining water rights claims, a tribe and other stakeholders may pursue either litigation or negotiation. Negotiating to reach a settlement in Indian water rights claims is advantageous for all parties. It is cheaper, takes less time and is more flexible than litigation. Negotiations may also foster better working relationships between all parties. This can have positive outcomes for not only the tribes but for the surrounding non-Indian communities as well.”

Last year Congress passed, and President Obama signed, H.R.3716, the Pyramid Lake Piute Tribe – Fish Springs Settlement Act. This legislation brought to a close a long fought legal battle over water rights, and in the end spurred a new partnership that will economically benefit all parties involved at no cost to taxpayers.

Taxpayers shouldn’t be on the hook for additional costs due to the hold up of these agreements, and this is why the settlements reached should be allowed to proceed. Over the past few decades we have seen these types of settlements approved and move forward without delay, so there’s no reason to stop that progress now. Just one settlement being held up can add more legal costs paid for unnecessarily by taxpayers and also negatively impact the local parties involved who have done the hard work to come to a resolution that suits everyone.

TPA is always encouraged when Congress actually works together to get something done, because it happens so rarely. In this case, these are routine settlements that have been negotiated in good faith by all parties involved and there’s no need for further delay that leads to more costs for taxpayers simply under the guise of the false notion that they are earmarks. TPA will continue to look at this issue and press for fair and swift resolutions that reflect the spirit of the settlements as congress intends.

(This post originally appeared on the website of the Taxpayers Protection Alliance and is cross posted here with their permission).

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Governor Brian Sandoval Flip-Flops on Nevada Margins Tax

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Posted by Paul Blair on Friday, January 23rd, 2015, 4:21 PM PERMALINK


In his 2015 State of the State Address, Gov. Brian Sandoval (R-Nev.) called for the largest tax increase in Nevada history. At more than $1 billion over the next two years, Sandoval’s tax hike will fuel massive budget growth, increasing the budget from $6.6 billion to $7.3 billion. This is a significant departure from his rhetoric over last year’s massive margins tax hike ballot initiative.  

Last year, Sandoval had this to say: “All things being equal, we prefer to keep more of our earnings. That fact makes new taxes a tough sell. As such, the proponents of new taxes, like any good marketer, ignore what’s unpopular about the product. Instead, they point to the alleged benefits of the tax, rarely mentioning the costs.”

“The margins tax, if approved, will jeopardize Nevada’s recovery.”

His 2015 State of the State Address: “Improving our public education system must therefore begin with modernization, and modernization requires investment. 

…I am therefore proposing a broad-based solution that asks Nevada business to invest in our education system. 

…It's time we are honest with ourselves — these revenues are now a part of our comprehensive budget. I know this approach will cause debate. You will all find that there is no perfect solution."

Governor Sandoval’s 2015 budget includes the following tax increases:

  • Cigarette tax hike from 80 cents to $1.20 per pack
  • Slot machine tax hike
  • Mining industry payroll tax hike to 2 percent, above the traditional 1.17%
  • Business license tax imposed based on gross revenue; the margins tax
  • Making permanent $580 million in “temporary” tax hikes including:
    • Payroll taxes
      • A .35% sales tax hike
      • A $100 increase in the business license tax

 

We rate this a full flip-flop.

Why was Sandoval opposed to tax increases in 2014 and in 2015 pushing the largest tax hike in state history? Was it because 2014 was a gubernatorial and legislative election year? Why is he doing what he accused proponents of tax increases in 2014 of doing, focusing on the alleged benefits, instead of the costs to businesses?

$882 million of Sandoval’s proposed spending increases are aimed at education, the same supposed target of the “Education Initiative” tax hike that voters rejected by a margin of 79%-21% last year.

Businesses and labor unions opposed the tax and for good reason. Gross receipts taxes hit thousands of small businesses and major employers without regard for their ability to pay, as the taxes are based on revenue, not profits. 

That’s precisely why only five states have gross receipts-esque taxes and one of them, Texas, may eliminate it this year. These taxes are extremely damaging to the economy. By creating complicated tax calculations, the administrative and compliance costs are massive. The governor’s proposal includes 30 such categories.

Republicans shouldn’t be in the business of complicating the tax code in order to placate teachers unions. This is especially true in the aftermath of a crushing defeat of the Education Initiative and in light of Republicans being swept into power for the first time in over 80 years. 

Nevadans should contact Governor Brian Sandoval at 775-684-5670 and ask him why he flip-flopped on the massive margins tax. This is a tax hike that Nevadans can’t afford. 

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ConfusedAmericanCitizen

I do believe that "R" he puts behind his name stands for "Reid".

Ron Kazmierczak

becoming like NY& cali someone has to pay for all those illegals and expansion that generates more cash to waste LOL i never seen such backwards thinking as this i know this will hurt big it will b a sucking sound

Rex Smith

gaming taxes used to support the whole state what happened ?


Will Obama's 529 Plan Tax Hike Also Hit Disabled Kids?

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Posted by Ryan Ellis on Friday, January 23rd, 2015, 11:37 AM PERMALINK


On top of everything else, it appears that President Obama’s 529 plan tax hike might also fall on–of all things–disabled children and the parents who save for them.

In the most embarrassing of all possible starts to 2015, President Obama’s administration appears to be in full retreat on their proposal to tax middle class college savings plans (known as “529 accounts“).  The final death blow to this reckless and politically suicidal assault on the American Dream came out yesterday when it was revealed by the Wall Street Journal that the Obamas made a $240,000 contribution to the 529 plans of their daughters back in 2007.  There’s nothing wrong with that, of course, but it is a tad hypocritical for Obama to want to deny the middle class their opportunity to save for their own children’s education, be the contributions ever so modest. Even the New York Times, of all outlets, is turning tail.

It can get even worse.

Back in December 2014, a little more than one month ago, President Obama signed into law the “Achieving a Better Life Experience (ABLE) Act,” which sailed through Congress.  It creates a brand new kind of 529 plan.  Traditional 529 plans are all about saving for college.  An ABLE account will be about saving for kids who will likely never get a “normal” college experience, or anything close to it.  Qualified expenses include things like disability education, housing, transportation, employment support, health and wellness, financial/administrative/legal costs, and even funeral fees.

Like other 529 plans, ABLE account contributions are made after-tax.  The money grows tax-free.  Provided the contributions and earnings are used for qualified disability expenses, withdrawals are tax-free.  They very much resemble Roth IRAs, except the savings intention here is disability costs and not retirement.

The Administration’s plan calls for all earnings distributions on 529 plans to be subject to ordinary income taxation, at rates as high as 39.6 percent.  Will this include the new type of 529 plan signed into law by President Obama just a month ago, the ABLE account?

If the Obama tax hike plan sweeps in ABLE accounts, they may never actually achieve liftoff.  Conventional 529 plans would “dry up” and die off, according to Joe Hurley of the 529 portal website savingforcollege.com. “States that are not able to retain sufficient assets in their 529 plans will have a difficult time keeping their plans open,” Hurley added.

Since ABLE accounts are only a little over a month old, none have actually been established yet by 529 sponsors (i.e., states).  If the tax treatment were to change, there would be no market for ABLE accounts and no incentive to invest resources in rolling them out for parents of disabled kids.

Even if ABLE accounts are excluded from the rest of the president’s tax hike plans for 529s, it would still kill them off.  Since ABLE accounts will only be offered in conjunction with the larger 529 accounts, the death of the latter necessarily means the stillbirth of the former.  It’s like shooting the horse and expecting the cowboy to keep riding.

Was all this done on purpose?  Did anyone in the Obama Administration raise their hand and say “wait, didn’t we just sign a 529 expansion–for disabled children–just before Christmas?”

Who knows?  My guess is “no.”  Considering how ill-conceived and botched this entire fiasco has been, crediting officials with thinking this deeply about the topic is a bridge too far.

Assuming that this 529 plan tax hike (including de facto ABLE account preemptive repeal) remains in the president’s budget, it will be fully fleshed out in the Treasury Department’s post-budget “Blue Book,” where all stupid tax ideas slouch toward Bethlehem, waiting to be born.  Only then will we find out for sure if some technocratic nimrods at the White House accidentally decided to tax the tax-free savings accounts of disabled children, or whether they were even more reality-addled and did it on purpose.

But can someone in the press please ask them between now and then?

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ATR Supports H.R. 310, the Taxpayer Transparency Act


Posted by Ryan Ellis on Thursday, January 22nd, 2015, 4:40 PM PERMALINK


Americans for Tax Reform supports the Taxpayer Transparency Act (H.R.310) and urges members of Congress to support this bill. The Taxpayer Transparency Act makes sure that the government is held accountable for spending taxpayer dollars for political purposes. This will foster increased transparency and government accountability, especially for government spending that promotes unpopular and broken laws.

Government accountability and transparency are nonpartisan ideals and requiring the government to disclose that their advertisements are being paid for by the taxpayers will let Americans know that they are the ones footing the bill.
 

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Rednecksrule

How do you feel about using taxpayer money to implement Obama's amnesty Norquist you tool? You favor Obama's amnesty don't you? You have no problem with taxpayers footing the bill for open door immigration jag off...


ATR Applauds South Carolina Gov. Nikki Haley’s Call for Income Tax Relief

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Posted by Patrick M. Gleason on Thursday, January 22nd, 2015, 3:39 PM PERMALINK


Great news for South Carolina taxpayers. In last night’s State of the State Address, Gov. Nikki Haley proposed reducing the state’s top marginal income tax rate from 7.0 percent to 5.0 percent, a 30 percent reduction.

This income tax reduction, which result in more disposable income for individuals, families, and small businesses across the Palmetto State, will be a boon to the state economy. It’s also a much needed reform in light of the competitive tax codes had by neighboring states.

As Gov. Haley pointed out in her speech:

“Some southeastern and southwestern states – Tennessee, Florida, and Texas – have no income tax at all.  Georgia’s tax is a full percent lower than ours, and just last year North Carolina cut theirs by two full points, to below even that…In that competitive environment, our state’s 7% income tax rate stands out and puts us at a disadvantage. In order to keep the ball rolling in our economy, we must bring down our income tax.”

South Carolina’s status as a Right-to-Work state that frees workers from coerced unionization makes it an attractive location for new investment, business relocation, and the subsequent job creation that follows. However, the state’s tax code relative to its neighbors and other states across the country are holding it back from reaching its full economic potential. Gov. Haley is smart to propose doing away with that hindrance. Gov. Haley’s effort to reduce the income tax is supported by a wealth of research.

Tax Foundation economist William McBride reviewed academic literature going back three decades and found, "While there are a variety of methods and data sources, the results consistently point to significant negative effects of taxes on economic growth even after controlling for various other factors such as government spending, business cycle conditions and monetary policy."

In McBride's survey of 26 studies, dating to 1983, he found "all but three of those studies, and every study in the last 15 years, find a negative effect of taxes on growth."

John Hood, former president of the John Locke Foundation, found that keeping state and local tax and regulatory burdens as low as possible fosters economic growth, when he analyzed 681 peer-reviewed academic journal articles going back to 1990.

"Most studies find," Hood stated, "that lower levels of taxes and spending, less-intrusive regulation correlate with stronger economic performance."

“Gov. Nikki Haley has proven time and again to be a tremendous defender of taxpayers,” said Grover Norquist, president of Americans for Tax Reform. “This latest proposal demonstrates that she recognizes the need for pro-growth, rate-reducing tax reform. It also stands in stark contrast to President Obama, who used his recent address to call for hundreds of billions in higher taxes. Once again, Gov. Haley shows us that the best policy reforms are coming out of the states.” 

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Mark Desser

NO BS. Progressive in the Right direction. I could get used to being a Progressive.

test

BS


Obamas Make Jumbo 529 Contribution While Pushing Repeal for Everyone Else

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Posted by Ryan Ellis on Thursday, January 22nd, 2015, 1:46 PM PERMALINK


President Obama proposed this week to tax the earnings on new contributions to “Section 529″ college savings plans. These plans work like Roth IRAs for college–you put in after-tax money, the money grows tax-free, and withdrawals are tax-free if used to pay for tuition and fees.

Obama wants the earnings on these plans to face ordinary income tax, at rates as high as 39.6 percent federally. 529 expert Joe Hurley correctly predicts that taxing 529 plans this way will result in their effective repeal, as new contributions in will “dry up” overnight.

The tsunami of popular outrage against the Obama proposal can be explained by seeing that this tax increase is really an assault on the American Dream.

But just your American Dream–not the Obamas’.

You see, back in 2007, Barack and Michelle Obama made a stunning $240,000 contribution to the 529 plans of their two daughters. There’s a special provision in 529 tax rules that allow for a “jumbo” contribution in exchange for not gifting any more money to your kids for the next five years. The Obamas (wisely) took advantage of this–you can see the actual tax form reporting here.

This is odd, considering some of the nasty things the White House has said about 529 plans in recent days. Administration officials have called 529 plans “inefficient,” that 80% of the benefits accrue to those making more than $250,000 per year, and that 529 plans should effectively be repealed in order to plus up an education tax credit. Obama Administration mouthpiece Slate went so far as to call de facto 529 repeal “a great idea.

In fact, the College Savings Foundation–which knows a thing or two about the 529 industry–says that 70% of families which own a 529 plan make less than $150,000 per year, and almost 95% of families make less than $250,000 per year (note that this is the Obama Administration’s preferred dividing line to mark off the “middle class”). The average account balance in these 12 million 529 plans is just under $21,000.

So which one is it?  Are 529 plans an evil distortion in the tax code? If so, why did the Obamas plow nearly a quarter of a million dollars in them back in 2007? And why does Obama want to effectively repeal 529s (there would be no reason to contribute without the tax-free growth) for middle class families today?

The Obamas have already gotten their full tax advantage from 529 plans. Under his plan, they would get to keep all the tax-free growth their quarter-million dollar contribution will yield. But they want to deny that to others not so fortunate, to middle class families struggling to save for college.

If that sounds familiar, it should. Back in 2009, President Obama tried to kill school scholarships for some 1,700 low income elementary school students in the District of Columbia. This was at the same time as he sent his daughters–the ones who benefit from the Obamas’ 529 plan contributions–to the uber-pricey Sidwell Friends School in town. All this was done to appease the teachers’ unions, who largely dictate education policy to Democrats.

The story is the same–only the best for the Obama clan and his friends, but everyone else can eat cake.

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WSE

Makes perfect sense to me...consistent with their strategy to make as many as possible dependent on the federal government for their student loans

CapitalistPig

Lets not forget the cutting of Pell grants from 18 semesters to 12. effectively cutting off anybody that needed help obtaining their Masters degrees.


The Grover Norquist Show: Obama Takes Aim at 529 College Savings Plan

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Posted by Alexander Hendrie on Thursday, January 22nd, 2015, 1:41 PM PERMALINK


During his State of the Union address, President Obama proposed taxing 529 college savings plan. 529 tax plans work by allowing families to deposit after tax funds into an account that then accumulates interest. When funds are withdrawn from the account to pay for college they are tax free.

Almost 12 million families rely on 529 plans to help pay for the costs of college but Obama’s proposal will tax these plans like ordinary income and destroy the viability of this widely used account.

ATR’s Grover Norquist and Ryan Ellis sit down to discuss how this new proposal will hurt the ability of middle class families to invest in their children’s college education.

 

 

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Grover Norquist Discusses the Great Cost of the “Great Society”


Posted by Dorothy Jetter on Wednesday, January 21st, 2015, 5:29 PM PERMALINK


Today Americans for Tax Reform President, Grover Norquist spoke at an event at the Council on Foreign Relations titled, “The Great Society at 50: Assessing the Legacy, Evaluating the Future.”  Norquist emphasized the importance of fiscal prudence in place of wasteful federal programs that promise taxpayers things they do not and cannot deliver.

While the New Deal and Great Society Eras are often referred to as successful periods of economic recovery in our history, the American people are still paying the price for entitlement programs established during these times. 

In fact, they represent half of all federal spending today and a large portion of every American’s income. Norquist pointed out that annually:

“The federal government spends 20% of what Americans make.”

The cost of President Lyndon Johnson’s so-called “Great Society,” is well, enormously great.  He continued:

“We have spent $20 trillion, inflation adjusted dollars, since 1964 on welfare programs.  Seventeen percent of income in the United States comes from means tested welfare programs.”

The American people are seeing the negative impacts of tax increases and federal entitlements implemented half a century ago, today.  Looking towards the future, Norquist reasoned:

“The real challenge is we can’t afford this, now or in the future.  Social Security has $10.6 trillion in unfunded liability.  That doesn’t mean $10.6 trillion owed sometime, that’s the present value of unfunded liabilities that we have in Social Security alone. Medicare is somewhere between $28- $35 trillion in unfunded liabilities.”

You can watch the entire event above.

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