Marketplace Fairness Act Will Sprinkle on More Taxes

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Posted by Cecelia Mitchell on Wednesday, February 10th, 2016, 5:28 PM PERMALINK

Yesterday the Wall Street Journal posted a blog on how some Dunkin’ Donuts in New York and New Jersey have been caught charging customers with unnecessary sales tax. Some Dunkin’ Donuts in New Jersey added on a 7% sales tax and some in New York added on an 8.875% sales tax on the purchase of packaged coffee and bottled water sold at the store. The issue with adding a sales tax to these items is that both New York and New Jersey have state laws exempting packaged coffee and bottled water from sales tax.

A couple overcharged customers decided to take action against this unnecessary tax imposed on them and are suing the parent company of Dunkin’ Donuts in both states.

Apparently the Dunkin’ Donuts that were applying the unwarranted sales tax were owned and operated by individual franchisees. The owners of the franchised Dunkin’ Donut stores should have been aware of the state laws governing their operation and should have complied with the taxation specifications exempting packaged coffee and bottled water from sales tax.

If so much confusion happened while getting a cup of Joe at some local Dunkin’ Donuts, then image how much confusion would happen if lawmakers started imposing sales taxes onto online purchases from small business.

The issue of consumers suffering from excess sales tax due to confusion of individual sellers mirrors the issues presented by the Marketplace Fairness Act, which would have placed extreme regulatory burdens on small businesses that operate online.

 The Act would have forced small online retailers to become tax collectors for states by making them to comply with over 10,000 complicated tax codes, including 45 state sales taxes and local tax jurisdictions.

To make matter worse, if small business became too overwhelmed and confused with these tax regulations imposed upon them and made an error in collecting taxes they would be forced to settle any disputes with out of state revenue boards in out of state courts, creating an even more complicated and burdensome situation.

If consumers were upset having to pay an extra tax because small business owners could not follow New York and New Jersey tax code, then imagine how angry consumers would be if small businesses in every state started making mistakes in tax collection and imposed unnecessary taxes on consumers out of pure confusion with the thousands of tax codes they are suddenly forced to comply with.

The Marketplace Fairness Act is still lurking in the wings.  The taxers and spenders on Capitol Hill are pushing hard to get this legislation through.  Governors want it so they can tax people that cannot vote for them.  Big Box stores want it to drive out their mom and pop competition by forcing them to deal with excessive paper work and regulatory threats from other states.   

If businesses physically in New York and New Jersey, who should be very familiar with their tax code exemptions for sales tax, were confused and couldn't get it right, it’s pretty clear that online sellers dealing with over 10,000 state and local tax jurisdictions would easily get confused. 

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Well said. The franchisees example is great.
Small business owners can expect to be hit by the auditeers... (Note: there are many unscrupulous auditing-services that are in the public and private sector),
The litigious...,
The CSP's... who may or may not provide the proper service in accordance with state requirements (even IF the state APIs and CSP softwares play nice), and the overall cost and setbacks to integrate software, hope it's supported w/o great additional expense...., and
Then of course learn to categorize products differently and pay employees for otherwise unproductive work...
Which all leads to a huge mountain for small business to climb and a hill for big retail to mow over.

Report Finds Half of Minnesota’s Obamacare Enrollees Were Ineligible for Program

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Posted by Sarah Feldpausch on Wednesday, February 10th, 2016, 5:10 PM PERMALINK

A recent auditor’s report examining Minnesota’s Obamacare exchange, known as MNsure, found the system was enrolling more than a hundred thousand Minnesotans who were ineligible for the program.

The report estimated as many as 132,140 individuals were not eligible for the program they had enrolled in and up to 107,870 individuals were not eligible for ANY program. The audit also estimated that there was an error rate of close to 50 percent, and the state may have overpaid up to $271 million over the five-month period that was analyzed by auditors.

The Office of the Legislative Auditor of Minnesota found that The Department of Human Services:

  • Failed to verify that people who enrolled in public health care programs through MNsure were eligible for those programs which prompted the department to overpay for healthcare benefits. The effective cost was nearly $11,000 just in January through May of 2015.


  • Failed to provide the county human service eligibility workers with sufficient training on MNsure. This generated incompetent workers likely to make errors in determining the enrollee eligibility status for public health programs.


  • Failed to resolve discrepancies with social security numbers, citizenship or immigration status, or household income that MNsure identified for further verification within the correct amount of time. This dramatically slowed enrollee application processes and furthered the risk of fraud


  • Paid Medical Assistance and MinnesotaCare benefits for enrollees whose incomes exceeded federal and state program limits. A sample portion of enrollees concluded almost 27% exceeded the income thresholds for the program in which they were enrolled. This resulted in an overpayment of $94,409 by the Department of Human Services.


  • Improperly used federal funds to pay for health care costs for MinnesotaCare enrollees age 65 and older. An estimated $1.2 million of federal funds were incorrectly allotted to age 65+ misclassified enrollees due to the system defect.


This black mark is not an isolated case when it comes to Minnesota’s Obamacare exchange. Enrollees in the state have faced a top premium increase of nearly 50%, according to recent data compiled by Freedom Works. Across the nation, enrollees in 34 states saw a top premium increases of 20% or more.

Alarmingly, Minnesota is not the only failed or failing Obamacare state exchange across the country. Exchanges in Oregon, Hawaii, Nevada, and New Mexico are costing taxpayers $733 million.

Of these, the most troubling is Oregon. The state’s $305 million exchange failed to work by the November 2013 deadline – or months later, and the system was soon shut down by then-Governor Kitzhaber, at an additional cost of $41 million in mostly federal funds.

Recently discovered emails suggest that the Cover Oregon debacle can trace its origins to the Governor’s partisan political advisors who closely managed the project and made the call to shut down the exchange in order to assist the Governor’s reelection campaign. It appears that Cover Oregon's infrastructure was close to 90 percent complete when this happened.

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Posted by Cecelia Mitchell on Wednesday, February 10th, 2016, 4:06 PM PERMALINK

Article Shared from Digital Liberty:

Federal Affairs Manager at Americans for Tax Reform and Executive Director of Digital Liberty Katie McAuliffe discusses why the Senate must pass legislation that bans Internet taxes forever in an Op-ed for The Daily Caller.

This week, Senators have the opportunity to stand up for Internet freedom and vote to keep the Internet Tax Freedom Forever (ITFFA) provision in the customs bill. A vote against ITFFA is a vote against the Internet.

In 1998, the Internet Tax Moratorium was enacted to ensure tax-free Internet access by preventing state and local governments from taxing Internet access or implementing discriminatory taxes on electronic commerce. Unfortunately, a few states were able to pass access taxes before the ban was enacted, and the ban is not permanent. Lawmakers reauthorized the Internet Tax Moratorium more than half-a-dozen times since its initial passage.”

McAuliffe goes on to explain how applying an Internet access tax when broadband Internet was first introduced into the market would have had disastrous effects.

“The consequences of imposing taxes on Internet access would have been detrimental to the adoption rate of broadband Internet access. To put it incredibly simply, tax on broadband Internet access increases the cost of consumer adoption. With an increased cost (particularly on an unfamiliar service) consumer demand stays low. However, lower costs lead to higher demand. Taxes on Internet access, as consumers moved to broadband, would have slowed the rate of “upgrade” adoption, which, in turn, would limit service providers’ ability to launch in and upgrade in different markets. Hence, broadband introduction into some markets would have been delayed.”

To read the full article click here

Fortunately for consumers and for the technological age Internet access has been kept tax free in most states allowing broadband access to spread to markets all over without consumers barring burdensome prices.

Now it is up to the Senate to recognize the necessity of keeping Internet access tax free by voting to make the ban on taxing Internet access permanent once and for all.

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ATR Hosts Small Businesses From Around Country to Discuss the Politics of Vaping

Posted by Paul Blair on Wednesday, February 10th, 2016, 1:54 PM PERMALINK

Last week, Americans for Tax Reform hosted small businesses from around the country for a happy hour to discuss “the politics of vaping.” Over 100 members of the Smoke-Free Alternatives Trade Association (SFATA) were in Washington, D.C. meeting with members of Congress in an effort to convince them to curb the implementation of the Food and Drug Administration’s regulatory assault and pending “deeming rule” on the sale and availability of electronic cigarettes and vapor products.

ATR President Grover Norquist with SFATA President Cynthia Cabrera

These tobacco-free technology products have faced an onslaught of tax and regulatory threats throughout the country. This, despite the fact that a recent government-funded study found that e-cigarettes are at least 95 percent less harmful than combustible tobacco cigarettes.

Beyond the policy issues the industry and its consumers face, ATR president Grover Norquist discussed the political implications of threatening the 9 million plus adult vapor product consumers in the context of the 2016 elections.

"I think that the next election, at the presidential level, and a lot of other levels, is going to be determined by the vaping community," said Grover. "Lifestyle issues win because of the power of the political support behind them," he said.

The Washington Examiner's Paul Bedard wrote about the event here. Quoting Grover, Bedard wrote:

"Vaping is not a product. It is a movement. It is a community, it is a political movement in support of a community and it's changing the country in very good ways," [Grover] said at a reception during a two-day lobbying effort on Capitol Hill by the association last week.

At the federal level, Congressional Democrats have stood in the way of a minor rule change that would allow the thousands of U.S. small businesses helping combustible cigarette smokers quit to continue doing so. Without action, the pre-market review and regulatory process required of these businesses would be unaffordable and some estimate it would equate to prohibition for 99 percent of the market. It should be noted that the pending regulation does not necessarily regulate the market; it simply requires businesses obtain permission from the FDA to continue to sell products to consumers. 

Click here for the most recent map of tax threats in the states. 

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Why The Sugar-Tax is So Bitter.

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Posted by Sergio J. Monreal on Wednesday, February 10th, 2016, 1:08 PM PERMALINK

Governments from all across the world, from Mexico to the United Kingdom to Berkeley, Calif. have made a strong effort to warn its citizens about the dangers of sugary drinks. Some governments have even gone as far as to impose an excise tax on sodas and other drinks in an effort to combat obesity. Let us take a look at this so-called government solution.

Well, firstly, “government solution” is a contradiction. Government seldom has any substantive solutions to any problem. To be clearer, such government “solutions” are more appropriately labeled as something else: a government demand. Many governments will now demand more of your money when you choose to consume a sugary drink. Yes, the “government solution” is in fact a new sugar-tax (to go along with a sales tax, income tax, property tax, air-breathing tax, and so on).

While some government bureaucrats foolishly believe that increasing the price of sugary drinks will decrease people’s appetite, in fact a Tax Foundation study found the opposite:

“Soda and candy taxes do not necessarily decrease caloric intake. One recent study finds that when adolescents switch away from soda due to price increases, the drop in calories is offset by an increase in calories consumed in other food and drink.”

And, yet, confronted with these facts, many will still argue for this flawed “solution”. But who does this tax really hurt? Put simply, low and middle-income families who cannot possibly afford to pay any more taxes (When politicians claim the middle-class is disappearing, they should be reminded that many families have been taxed out of the middle class). Raising the price of everyday goods millions of Americans use, such as certain beverages, can only be referred to as callous government-policy—callous, even for our government.

The government seldom does anything out of the goodness of its heart, so what does it have to gain? Revenue. If only government saw its unrestrained spending and taxing as dangerously as it sees sugary drinks.

We should not expect these types of sugar-taxes to go away any time soon. There is a real demand for the product and as we all know, where consumer demand goes, so does government taxation.

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Nothing from the government is ever really "free".


Precisely. When you give control of your health care to society. it gives society a moral right to regulate your health, habits, actions and maybe even personality.


Those governments subsidize health care. The sugar tax is a sin tax in those countries.

Governor Mary Fallin Violates Taxpayer Protection Pledge in Budget Requests

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Posted by Emily Leayman on Wednesday, February 10th, 2016, 9:18 AM PERMALINK

Oklahoma faces a $900 million overspending problem, and that number could reach as high as $1 billion with falling gas prices and lower tax collections in December. Gov. Mary Fallin’s solution is $910 million in “recurring revenue,” an evasive term for tax hikes.

In her state of the state address Monday, Feb. 1, Fallin, a Taxpayer Protection Pledge signer, proposed:

-$181.6 million from a $1.50-per-pack cigarette tax hike

-$200 million from reducing sales tax exemptions and expanding sales taxes.

Oklahoma’s cigarette tax is currently $1.03. Fallin argued that cigarettes lead to an annual $1.6 billion in health costs. Nearly every dollar Fallin anticipates receiving, as a result of the cigarette tax increase, will be plowed into teacher raises, constituting $178.4 million in higher annual spending. This isn’t about the impact of smoking on public health costs; it’s about extracting resources from those who can least afford it to fund an addiction to overspending.

Fallin emphasized that her plan does not raise the 8.77 percent sales tax, the sixth highest combined state and local rate in the U.S. But she does want to apply sales taxes to more items, insisting the state has too many outdated exemptions. She points to neighboring states as a model for implementing more sales taxes:

“This budget proposes eliminating outdated exemptions and looking at areas other states apply sales tax to that aren’t subject to sales tax in Oklahoma. The Texas sales tax covers roughly 60 more categories than Oklahoma’s. New Mexico’s sales tax covers 130 more categories than Oklahoma’s.”

Conservative tax reform includes both a broadening of the base for taxable goods and services AND a reduction in the rate, not simply an expansion of things taxed.

Fallin isn’t only consumed by the concept of extracting more money from Okalahoma taxpayers; she has called on Congress to implement a national online sales tax as well:

“We all know that cities and states are losing out on sales tax revenue each year as more business is conducted online, and states like Oklahoma can’t collect sales tax because of federal inaction. We all need to call on Congress to level the field for small businesses and Oklahoma retailers by implementing a fair system for online sales tax.”

Proposed legislation could do just that in the Sooner State. House Bill 2925 would allow the state to collect sales taxes from online retailers like Amazon.

Gov. Fallin’s proposal stands in stark contrast to recent accomplishments made in Okalahoma. Most notably, she pushed for income tax cuts, which into effect last month.

Defending the tax cuts in December, Fallin said:

“Tax policy is long-term policy and, over the long term, a lower tax burden is good policy and the policy the voters have asked for in Oklahoma. If Oklahoma wants to attract and retain good jobs — rather than losing them to neighboring states — we must improve our tax climate.”

Today Fallin’s outlook is a complete turnaround. Her new proposals — creating more sales taxes and raising the cigarette tax —would not improve the tax climate. The cigarette tax, currently the 30th-highest, would reach the top 10 if Fallin’s proposal went through.

Oklahoma does not have a revenue problem; it has a spending problem. Instead of straddling low-income consumers and families with higher taxes, the legislature should rein in spending instead.  

Not only does her budget constitute a violation of the Taxpayer Protection Pledge, a vote in support of it by legislators would be a violation as well. ATR urges the legislature to reject this senseless cash-grab.

Read Fallin’s entire state of the state address here


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The "taxpayer's protection pledge" has not reduced government spending or "shrunk" government but only raised debt! It is a simplistic idea that does not face the reality of what is needed to run a State or Nation. Even Reagen raised taxes after his tax cut. The Governor is just facing real world choices. Do you just want more debt???

My political satire, entitled "Taking the Tea Party Republican Tax Pledge", is on YouTube. Here is the link


The Governor has every right to support the collection of sales taxes already legally due on remote Internet purchases. The Marketplace Fairness Act supports States' rights to collect sales taxes already legally due on remote transactions. The MFA in no way enacts or creates a new tax.

Logic Prevails, Supreme Court Blocks Obama's Carbon Rule

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Posted by Justin Sykes on Wednesday, February 10th, 2016, 8:40 AM PERMALINK

The Supreme Court dealt a major blow this week to President Obama’s climate legacy and his aggressive regulatory regime. The Supreme Court (SCOTUS) ruled in favor of staying the EPA’s Clean Power Plan (Carbon Rule), meaning the rule cannot take effect while legal challenges are ongoing.

The stay by SCOTUS prevents the EPA from enforcing the carbon rule until lower courts decide on challenges brought by a number of states and industry groups that have alleged President Obama and the EPA exceeded their authority. The ruling confirms what many opponents of the President’s carbon rule already new: that the rule exemplified federal overreach; would be catastrophic for states and the economy; and was premised on backwards and illogical legal grounds. 

As Harvard Law Professor and Obama mentor Laurence Tribe has stated, the rule “lacks legal basis” and “is a remarkable example of executive overreach and an administrative agency’s assertion of power beyond its statutory authority.” The court obviously realized just how disastrous this rule would be for the country, while at the same time having little to no impact on the environment. 

The President’s Carbon rule represents the worst of federal overreach, and would have sent electricity rates soaring by double digits in over 40 states. The rule was also projected to kill thousands of jobs, potentially pushing integral industries to look for lower energy prices, potentially overseas.

The ruling by SCOTUS blocking the carbon rule prevents an economically disastrous outcome, much like what was seen with the recent mercury rule. In Michigan v. EPA, the Supreme Court ruled that the EPA’s Mercury regulation was legally unsound. However roughly 40 gigawatts of generating capacity had been prematurely shut down in response to the rule despite the fact the legal challenges had not yet been resolved.

To begin implementing the new carbon rule before legal resolution would have repeated the mistakes of the past, destroyed thousands of jobs, and cost millions in wasted taxpayer dollars. The ruling by the Supreme Court this week is a victory not just for the states and American economy, but also a victory for basic common sense and logic. 


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Obama Budget Will Crush Medical Innovation

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Posted by Alexander Hendrie on Tuesday, February 9th, 2016, 4:16 PM PERMALINK

President Obama’s final budget includes a proposal to reduce the period of brand exclusivity available for biopharmaceuticals. While it may sound innocuous, this proposal would squeeze the ability of researchers to recoup the steep costs associated with creating new medicines, which in turn will crush their ability to create the next generation of medicines.      

Under current law, a new biologic is given 12 years of exclusivity. This number was not plucked out of thin air by lawmakers, it was created to ensure innovators are able to recoup the extensive R&D costs. The Obama budget proposes to cut this exclusivity period to just seven years and would prohibit additional periods of exclusivity when the product formulation of a biologic is altered.

These changes will take a heavy toll on the creation of new cures. Currently, it costs researchers an average of $2.6 billion and over ten years to develop a new medicine. In 2014 alone, pharmaceutical firms spent over $51 billion on research, while over 50 new drugs entered the market. In order to maintain this rate of innovation, companies are faced with a delicate balance to ensure they are able to finance new research and development.

The Obama budget claims these proposals will increase access to medicine through the development of generics. But by eroding innovator protections, the administration will cut off the stream of resources that allows the development of new medicines for decades to come.

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Obama Budget Calls for $1 Billion More for the IRS

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Posted by Alexander Hendrie on Tuesday, February 9th, 2016, 2:18 PM PERMALINK

President Obama’s final budget calls for over $1 billion in additional funding for the IRS, which would bring the agency’s total budget to over $12.3 billion in 2017. Given the IRS's record of ineptitude and incompetence, the last thing the agency needs is more money.

The budget proposal includes an additional $530 million in direct, discretionary funding and $515 million for a “multi-year program integrity cap adjustment for tax enforcement.”

Over the past year, the IRS management has repeatedly claimed the agency is starved of taxpayer dollars.

But in reality, the agency is poorly managed and has failed time and time again at its basic responsibilities. Taxpayers are being ill-served by inept bureaucrats that are more concerned about harassing conservatives and businesses than doing their job:

-The agency has continued to drag its feet in implementing reforms, even following the agency targeting conservative groups between 2009 and 2012. This targeting resulted in just one conservative non-profit being granted tax exempt status over a three year period.

-A pair of reports released by the Government Accountability Office (GAO) found that serious internal control flaws mean the IRS may still be unfairly selecting Americans for an audit “based on an organization’s religious, educational, political, or other views.”

-In addition to misspending funds targeting first amendment rights, the agency has failed to properly allocate spending. According to the National Taxpayer Advocate’s 2015 Annual Report to Congress the IRS is unable to justify spending decisions. As the report stated:

“The IRS lacks a principled basis for making the difficult resource allocation decisions necessitated by today’s tight budget environment.”

-The IRS failed to properly prioritize funding even when budgetary pressure did not exist. The agency has failed to produce a single report on tax complexity since 2002, despite federal law requiring one be compiled each year.

-In fact, the IRS budget has doubled in the past 30 years, even after adjusting for inflation, according to an analysis by Cato Institute economist Dan Mitchell, Although its funding has declined since 2010, it remains higher than mid 2000s levels.

Rather than throwing away over a billion dollars in new taxpayer funding to the IRS, the agency should be held accountable to the American people through a series of reforms that limit the power of unelected bureaucrats.


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Obama Budget Calls for $3.4 Trillion Tax Hike

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Posted by Alexander Hendrie on Tuesday, February 9th, 2016, 11:51 AM PERMALINK

President Obama’s final budget will increase taxes on the American people by up to $3.4 trillion over the next ten years, according to the House Ways and Means Committee.

The President’s adjusted baseline predicts revenues of $43.1 trillion over the ten year window, while his proposed budget calls for revenues totaling $46.5 trillion – an increase of $3.4 trillion.

The Obama budget will result in massive new taxes on already overtaxed American families.

Many of Obama’s new tax hikes violate the spirit – if not the letter -- of Obama’s “firm pledge” against “any form of tax increase” on any American earning less than $250,000.

One previously announced tax hike in the Obama budget calls for a $320 billion energy tax increase on the American people. This new tax comes in the form of a $10 tax per barrel of oil that will be passed onto drivers in the form of higher prices at the pump.

This tax hike would be used to finance a massive new “clean transportation” program that would spend billions on bullet trains, self-driving cars, and a “climate smart fund.”

See also:

Obama Budget Contains $320 Billion Energy Tax Hike

Obama's Final Budget: Highest Cap Gains Tax Since 1997


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The madman is at it again. The only part of running a country he's good at is running it into the ground.