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New Cato Institute Report Grades Governors on Fiscal Policy

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Posted by Damien Salamacha on Tuesday, October 14th, 2014, 11:03 AM PERMALINK


The Cato Institute released their biannual Fiscal Policy Report Card on America’s Governors 2014, which examines state budget actions since 2012. From a limited-government perspective the report grades America’s governors based on their fiscal policies and actions.  Governors that were able to reduce spending and taxes the most received the highest grades, while governors that increased spending and taxation received the lowest grades. 

One of the four governors to receive an “A” was Governor Sam Brownback of Kansas.  The report highlighted major tax reform initiated by Gov. Brownback in 2012 as a key factor in earning him a high rating.  Through tax reform in Kansas the number of tax brackets were reduced from three to two, while the top rate was cut from 6.45 to 4.9 percent.  The reform also increased standard deductions, reduced taxes on small businesses, and repealed numerous narrow tax breaks.  Additionally, Gov. Brownback approved changes in 2013 that included further income tax cuts and broadened the income tax base.  Aside from the tax reform, the report also noted the governor’s ability to be frugal with budgeting which has resulted in only minimal increases in general spending.

Also among the governors earning an “A” was Governor Pat McCrory of North Carolina. One factor that lead to Gov. McCrory receiving a top grade was:  a major tax reform package in 2013 which replaced three individual income tax rates (6.0, 7.0 and 7.75) with a single rate of 5.8 percent falling to 5.75 percent in 2015.  In addition to this, McCrory also helped cut the corporate tax rate, repeal the estate tax, and broadened the sales tax base.  The report noted that Gov. McCrory has been able to keep spending under control, while recently enacting further tax cuts for 2014. 

Also earning an “A” was Governor Paul LePage of Maine.  The factors that lead to Gov. LePage receiving the top grade were: his continued support for further tax and spending reforms, the relative consistency of general funding during the past three years, a reduction in state government employment, and the cost-cutting reforms to welfare and healthcare programs.  Also noted was Gov. LePage’s use of the veto to stop tax hikes, which were ultimately overridden by the state legislature.  This year LePage has proposed matching $100 million in new tax cuts with $100 million in spending cuts.

A governor who did not fare well in the report was Colorado Governor John Hickenlooper.  Some of the factors that earned him a failing grade were:  general funding increases from $7.2 billion in 2012 to a proposed $9.2 billion in 2015 and proposed spending increases averaging 6 percent for the past three years.   His recent budget which included a 15 percent spending increase for higher education as well as new spending on corporate welfare, and an increase in state government employment by 16 percent over the past three years.  In addition, Gov. Hickenlooper advocated for a large personal income tax increase that was on the ballot in 2013 which would have replaced Colorado’s flat 4.63 percent income tax with a two-rate structure of 5.0 and 5.9 percent.  Luckily the amendment did not pass.

Three of the governors previously mentioned are up for re-election and are currently in close races.  Kansas Governor Brownback is currently tied with his challenger Paul Davis according to the Real Clear Politics average.  President of Americans for Tax Reform Grover Norquist has called Kansas’ gubernatorial election “the most important race in the 2014 cycle”.  While Real Clear Politics has Maine Gov. LePage leading by a half a point over his challenger Mick Michaud, and Governor Hickenlooper leading by 2.5 points over his challenger Bob Beauprez in Colorado.  North Carolina Governor Pat McCrory is not up for re-election this year.

With the release of the Cato Institute’s biannual report, taxpayers will be able to see which governors are fiscally responsible and which are addicted to taxing and spending.  Governors Brownback, LePage, and McCrory earned high marks for their ability to engage in real reform by lowering taxation and spending.  Alternatively, Governor Hickenlooper has received the lowest grade possible due to his taxing and spending policies. 

 

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Ludwig

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Todd Dunning

Yes, biased towards the taxpayer.

jd

It was founded as the Charles Koch Foundation....hmmmm there not biased....Grover swears...


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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U.S. Senate Candidate Ed Gillespie on Taxes


Posted by Adam Radman on Monday, October 13th, 2014, 10:17 PM PERMALINK


Republican candidate Ed Gillespie ​did not sign the Taxpayer Protection Pledge. Gillespie informed ATR that he has a policy against signing pledges. However, he did make a firm public commitment to the taxpayers of Virginia that he would oppose higher taxes.

The following statement by Ed Gillespie makes that abundantly clear:

Raising taxes on American families and businesses that are already too high would only impede economic growth and make the problem worse. We do not have deficits because taxes aren’t high enough, we have deficits because Federal spending is out of control and our economy is not creating enough jobs. I promise my fellow Virginians I will fight and vote against any efforts to increase marginal income tax rates on individuals and businesses, and oppose any net reduction or elimination of tax deductions and credits unless they are matched by equal reductions in tax rates. Growing our economy and getting spending under control are the keys to resolving our burgeoning federal debt, not further adding to the tax burden on American families and businesses.

ATR displayed Gillespie in the database as having written a letter to the taxpayers of Virginia. We did not display a copy of a Pledge, because he did not sign one.

Sen. Warner, on the other hand, voted to impose 20 different taxes on Virginians when he voted for Obamacare. He has voted for all the tax hikes Harry Reid told him to.

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Free Market - Not Government - Develops Innovative New Blood Test

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Posted by Matthew Bruno on Monday, October 13th, 2014, 3:54 PM PERMALINK


Elizabeth Holmes dropped out of Stanford at the age of 19 to pursue her idea for making blood tests cheaper and easier. Ten years later, Holmes is the world’s youngest female billionaire and her company, Theranos, valued at over $9 billion, is nearing entry to every Walgreens throughout the country. A competitive free market, not over-subsidized government programs, produced this innovative and life-saving solution.

Theranos’ use of a few drops of blood obtained via fingerstick rather than traditional needle tests lowered one diabetic woman’s test costs from $876 to $34. This 96% savings is a simple example of how healthcare costs throughout the country can be lowered through advances in technology. Free markets encourage new products to be developed with the goal of efficiency, cost-effectiveness, and high success rates. These lower costs can then be passed on to the patient. Instead of raising new taxes or fees or whatever Obamacare wants to call its countless mandated charges, real healthcare reform can cut costs through encouraging innovation in a free marketplace.

As Milton Friedman famously observed, we spend the most economically when we spend our own money on ourselves. Conversely, we are the least efficient when spending somebody else’s money on somebody else. In much the same way, government run healthcare is least efficient when the government raises taxes (someone else’s money) to spend on enhanced welfare programs (someone else). In order to make the American healthcare system more efficient and lower costs, we must realign incentives so that patients are invested in their coverage and must look for the most cost-efficient alternative. On the other end, insurance providers will seek to cut costs by finding the cheapest and most effective forms of treatment. Holmes and Theranos were allowed to freely innovate; this freedom ultimately produced a life-saving medical breakthrough that they estimate will save US Medicare and Medicaid around $200 billion a decade. This innovation is what will lead to higher quality, lower cost medical care.

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ATR Endorses Proposition 487, the Phoenix Pension Reform Act

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Posted by Paul Blair on Monday, October 13th, 2014, 2:52 PM PERMALINK


Like many cities throughout the United States, Phoenix, Arizona has a broken pension system. Skyrocketing costs have driven the city to the brink of disaster. Fortunately, Proposition 487, also known as the Phoenix Pension Reform Act, is on the ballot this year and gives voters a say in the type of publicly-funded pension plans they pay for.

The initiative can be read here.

A number of factors have contributed to the immediate need for pension reform in Phoenix. “Pension spiking,” where employees inflate compensation immediately before retiring increases pension payouts upon retirement, will cost the city over $190 million if left unchecked. This occurs when a city employee close to retirement converts benefits like unused sick time or saved vacation pay to boost benefits.

A select group of retirees have been receiving six-figure pension payouts with this scheme, compliments of Phoenix taxpayers. One recent City manager received an annual pension of $246,813 and upon retiring received $270,174 in sick/vacation days payouts. Another city employee, an executive assistant to the fire chief, received a lump-sum payout of more than $900,000 at age 54. That was on top of his $149,420 annual pension for life.

The Arizona Republic estimates that pension spiking costs city taxpayers $12 million per year. Prop. 487 would prohibit this outrageous practice.

The city's current defined benefit pension system is underfunded by $1.5 billion dollars and annual pension costs have increased by over 40% since 2011 to $253 million. Prop. 487 would replace the defined benefit pension with a 401(k)-type plan for city employees. It would exempt police and firefighters.

The Arizona Republic Editorial Board had this to say: “These dramatic changes will give Phoenix control over skyrocketing pension costs that threaten to strangle the city's ability to provide the services Phoenix residents have come to expect.”

They ultimately endorsed the proposal. “Prop. 487 promises to stanch the financial bleeding that is costing Phoenix taxpayers and seriously threatening city services.The Arizona Republic recommends a 'yes' vote.”

Americans for Tax Reform agrees with the Arizona Republic and endorses Phoenix's Proposition 487.

If you live in Arizona and haven’t already voted, click here to find out where to vote in person.

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ATR signed an International Coalition Letter against Global Taxation

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Posted by Lorenzo Montanari on Friday, October 10th, 2014, 2:10 PM PERMALINK


On October 13, the World Health Organization (WHO) will meet behind closed doors in Moscow to once again consider mandating expansive excise taxes that degrade national sovereignty. In response to the numerous attempts by global institutions to implement regional and international taxes, Americans for Tax Reform (ATR) and Property Rights Alliance together with 20 taxpayer and free market groups from 15 countries has released an international coalition letter promoting tax competition and outlining firm opposition to transnational taxation and to any increase and harmonization to excise taxes.

Excerpt from the letter:

 We, the undersigned taxpayer, free market groups and individuals support tax autonomy and oppose any regional or international tax changes that include “harmonizing” tax rates or introducing new taxes. Such schemes have been proposed through the European Union (EU), the United Nations (UN) and the Organisation for Economic Co-operation and Development (OECD).

 Tax competition can be a key factor driving countries to lower tax rates and increase economic activity.” […] Tax Competition, by contrast, is a natural dynamic that allows people to move economic resources from high tax areas to low tax areas. […]

 A much-discussed tax is the Financial Transactions Tax (FTT), also known as the Tobin Tax, which has been proposed in various guises by different bodies over the past few years including the EU. One model, proposed by the UN, is a world tax imposed on all financial transactions, with the goal of funding a global model of social services including basic income, free healthcare, education and housing to those the UN deem in need. […]

There have been attempts by the EU and by the World Health Organization (WHO) to establish uniform excise taxes on products such as sugary drinks, tobacco, and alcohol.  This would represent a dangerous precedent, and such excise taxes could be easily extended to all other consumer products.

Please click the link to read the full letter.

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john

And you are ranting against what? Did you do an analysis of the costs of upping the funding for the WHO? Spread out over the First World economies? Do you even know what the WHO budget is for this year? Do you realize that the US government is allocating $750 million dollars for intervention in the Ebola epidemic? Do you know what percentage of the WHO budget $750 million dollars is?

Please attempt to understand the issues before you decide to publish an article on the subject.


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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4 Reasons for a Permanent Internet Tax Moratorium

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Posted by Matthew Bruno on Thursday, October 9th, 2014, 4:42 PM PERMALINK


Without further Congressional action, states and localities will begin taxing Internet access as soon as December 11th. A permanent moratorium, the Permanent Internet Tax Freedom Act, has passed the House with a simple voice vote, demonstrating bipartisan agreement about the importance of a tax-free Internet. Unfortunately, Senate Democrat Leader Harry Reid has refused to introduce the bill to the Senate, preferring to hold out for a remote sales tax increase through the so-called “Marketplace Fairness Act” (MFA), a highly controversial issue. Polling shows Americans overwhelmingly oppose Reid’s scheme to tax online sales, but a large majority of Americans can get behind a permanent continuance of a tax-free Internet. Nonetheless, in a classic show of divisive politics, Harry Reid has held hostage the freedom of the Internet to pass a tax increase on Americans that buy products online or over the phone.

No American wants to pay more taxes, but taxes on access to the Internet is bad economic growth policy, not just tax policy. Here are the top four reasons why a permanent Internet tax moratorium is necessary to stop this. 

1. Keeping the Internet tax free encourages online innovation and digital entrepreneurship. Online investment and tech startups would be disincentivized to the point of obscuring the open and inventive Internet we all know and love. The United States is a global tech leader due to our private development and deregulation of online ventures. A tax moratorium also promotes innovation in cost-defective expansion of broadband access. An Internet access tax would be another cost paid by customers and Internet Service Providers (ISPs) that would ultimately turn companies away from creating new developments in the tech space. Taxing Internet access would serve to hamper this industry in much the same way other great American industries (auto, manufacturing) have been hamstrung by government interference.

2. Taxing the Internet would have a harsh impact on lower income families. This is the demographic that a tax-free Internet serves to help and assist in seeking employment. Raising the cost of the Internet through a usage tax would diminish the overall number of users. A recent study predicted that a 10% increase in price can be expected to illicit a 15% reduction in adoption. This negative growth is the antithesis of a free Internet.

3. An Internet access tax would raise the costs of all Internet-related business. Whether it be the price of ISPs, the cost of running and maintaining a website, or transaction fees of e-commerce including online shopping, a usage tax would hurt all Internet users. In much the same way that rising gasoline prices are felt throughout the economy, raising the cost of using the Internet would be seen by all online participants.

4. Access taxes would be yet another permanent part of the government shakedown. If the moratorium expires, state and local governments will be able to tax access to the Internet. If the ban is allowed to expire and governments start taxing access (which they certainly would), these funds would be built into state budgets with vested interests devoted to keeping these taxes in place. As every previous tax has proven, you can’t put the toothpaste back in the tube.

Permanently extending the Internet Tax Freedom Act is a crucial step in safeguarding long-term American Internet prosperity and continued online growth. Americans for Tax Reform, Digital Liberty, and supporters of Internet freedom throughout the country endorse a permanent moratorium on Internet access taxes.​

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ATR Opposes Gas Tax Increase in New Jersey

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Posted by Paul Blair on Thursday, October 9th, 2014, 2:26 PM PERMALINK


Americans for Tax Reform president Grover Norquist sent a letter to the New Jersey legislature and Governor Chris Christie this week urging them to reject efforts to increase the gas tax. After years of reckless overspending, the Transportation Trust Fund has racked up $18 billion of debt and is close to running dry.

A second hearing will be held in New Brunswick on October 14 where a number of special interests are expected to reiterate their calls for a gas tax increase. The state should reject these calls because a gas tax hike would harm families struggling to make ends meet, families who have had to grapple with 20 new or higher federal taxes over the past several years. A vote for any transportation funding package that raises the gas tax without dollar for dollar tax cuts elsewhere would be a violation of the Taxpayer Protection Pledge.

New Jersey doesn’t have a revenue problem; it has a spending problem.

A large reason the Trust Fund is out of money is because capital costs for transportation projects are astronomically high. According to the Reason Foundation’s 21st Annual Report on the Performance of State Highway Systems, New Jersey spends $2.02 million per mile of highway, more than any other state in the nation. New York spends less than a quarter of what New Jersey does at $462,000 per mile on its transportation system. Project Labor Agreements and prevailing wage laws have greatly contributed to exorbitant costs and a bankrupt Transportation Trust Fund.

Transportation packages that do not contain solutions for reining in spending and addressing these cost-drivers will do little to solve New Jersey’s long-term problems. The legislature should commission an independent audit aimed at identifying waste and mismanagement of Trust Fund dollars. Otherwise, tax dollars actually spent on transportation projects will continue to benefit those who build roads far more than those who actually use them.

New Jersey is already among the highest taxed states in the nation. Residents pay the highest property taxes and some of the highest income and corporate taxes as well. The state comes in second to last for the Tax Foundation’s Annual State Business Tax Climate Index. Discussions revolving around raising the gas tax make it seem as if there is a race to the top on every tax that exists in the state.

Legislators should work to cut costs, rein in spending, and reject all efforts to increase the overall tax burden.

Click here to read the letter. 

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Taxpayer Dollars Used to Fund Union Activities (and more...)

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Posted by Zoe Crain on Thursday, October 9th, 2014, 1:00 PM PERMALINK


Connor Wolf of The Daily Caller wrote an article discussing the massive amount of taxpayer funds that are spent on union activities for public employees.

Matt Patterson, executive director, for the Center for Worker Freedom, told the Washington Examiner the relationship between public-sector unions and federal agencies was suspect at best.

“People are under the impression that tax dollars go to pay public employees to do public business, but that’s not always so,” Patterson said. “It all amounts to a huge public payoff from elected officials to their Big Labor campaign contributions.”

The American Spectator’s Matt Schlapp wrote about Kansas Governor Sam Brownback’s successes over the course of his term.

Four years ago, Sam Brownback was elected the governor of Kansas in a landslide. Within two years, he was able to elect a conservative majority in the state senate, a goal that had alluded GOP activists for decades. Then Brownback did what he said he would do- cut taxes, reformed education, and opposed Obamacare, earning the praise of many on the right, including Grover Norquist.

First, it has become a truism that when a Republican governor aggressively takes on the left, he or she will be viciously attacked. Brownback has succeeded in enacting a solid conservative agenda. He eliminated income taxes on small businesses, and reduced income taxes on everyone else. He fought to keep coal as part of electricity generation feedstock. He refused the money and mandates of the Obamacare Medicaid expansion. Combine Brownback’s bold reforms with his longtime reputation as a cultural warrior, and you get a tantalizing target for the left.

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