ATR's Katie McAuliffe Calls for a Telecommunications Act Update in the Hill

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Posted by Meagan Nelson on Thursday, February 5th, 2015, 4:14 PM PERMALINK


Remember the days when we had dial-up Internet and Polaroid cameras? Well, today in 2015, with air cameras and fingerprint identification, Back to the Future was not far off in predicting what this year would bring to us, writes Katie McAuliffe in an OpEd in The Hill.

Americans for Tax Reform drew attention to the issue today by hosting a replica DeLorean time machine near the Capitol South Metro Stop, The Monocle, and outside its office, where passersby took photos and tweeted them out under the hashtags #19yrsAgo and #CommActUpdate.

Americans for Tax Reform’s Katie McAuliffe discusses in The Hill how our current Telecommunications Act does not account for these new technologies, or simple tools like Google or Facebook. According to the article, the 1996 Act, still in place today, is based on the Communications Act of 1934, itself based on laws from the 1800s.

Read the full OpEd here and be sure to follow #19yrsAgo and #CommActUpdate February 5th and 6th to see all of the photos reminding us what 1996 was like, and how movie magic predicted 2015 way better than Congress!

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ATR Supports Senate GOP Balanced Budget Amendment


Posted by Ryan Ellis on Thursday, February 5th, 2015, 3:23 PM PERMALINK


This week, a Balanced Budget Amendment to the Constitution was introduced in the U.S. Senate. This Balanced Budget Amendment proposal is pro-taxpayer and will help put America on a path towards fiscal responsibility. ATR urges all Senators and Congressmen to support the BBA.

S.J. Res 6 has been cosponsored by all 54 Republican Senators. This common sense proposal will help direct members of Congress towards enacting fiscally responsible policies.

This amendment limits spending to 18 percent of Gross Domestic Product (GDP). Capping spending at 18 percent requires government to live within its means. This strict spending cap is a significant step towards reining in the size of government and will help protect taxpayers from reckless and unnecessary government spending.

Most importantly, this amendment will protect taxpayers from unnecessary and burdensome taxes and instead requires Congress to balance the budget in a responsible way. S.J. Res 6 requires a two-thirds supermajority of members of each House of Congress in order to enact any new tax. However, 48 members of the Senate and 221 members of the House have signed the Taxpayer Protection Pledge, promising their constituents they will not support any proposal that contains a net tax increase. Therefore, the BBA will prevent Congress from balancing the budget using tax hikes and will instead force politicians to address Washington’s rampant spending problem by reducing spending.

S.J. Res 6 will rein in out of control government spending, protect taxpayers and force Congress to live within their means. ATR encourages members of the Senate and House to support the BBA.

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ATR Urges Congress to Reject Restoration of American's Wire Act

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Posted by Katie McAuliffe on Wednesday, February 4th, 2015, 2:52 PM PERMALINK


Today, Wednesday February 4th, Americans for Tax Reform sent a letter to Congressmen urging them to reject the Restoration of American’s Wire Act (RAWA) based on 10th Amendment concerns.

A summary of the letter is below, and a link to the full letter can be found here.

Strong differences of opinion exist about the appropriate level of regulation of online gambling, both among and between civil libertarians and law-and-order conservatives. Some believe a legal regulatory regime is the best way to protect consumers and children, while some believe that a ban is ideal. 

Even though strong opinions and business interests exist on both sides of the appropriate level of regulation of online gambling, fundamentally this is a question of the defense of the 10th Amendment of the U.S. Constitution.

As you consider RAWA we hope you will reject federal intrusion into this issue, and instead allow the states to continue making their own decisions about the regulation of intrastate online gambling, just as they have done with brick-and-mortar gambling for hundreds of years. 

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New Government Study Gives Keystone the Green light

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Posted by Cassandra Carroll on Wednesday, February 4th, 2015, 2:07 PM PERMALINK


Yesterday the EPA released its review of the Department of State’s final Supplemental Environmental Impact Statement for the Keystone XL pipeline. The EPA’s comments were largely positive, which is saying something given the EPA’s recent partisan leanings. 

The EPA makes note of how thoroughly the State Department’s final SEIS addresses their previously brought up concerns, stating that “The Final SEIS is comprehensive and provides responses to our April 2013 comments on the Draft SEIS. We would like to especially point out the usefulness of the new compilation of all of the proposed mitigation measures.”

In Keystone’s favor, the comments recognized that the State Department has put serious consideration into oil spill prevention, preparedness, cleanup, and mitigation of damage. It also confirms Keystone as being accountable should any spills occur, and responsible for cleanup. According to the EPA: “The Department has also strengthened the analysis of oil spill prevention preparedness, response and mitigation and has committed to requiring numerous mitigation measures regarding leak prevention and detection, as well as spill cleanup measures. While risks of oil spills and adverse impacts remain, and spills of diluted bitumen can have different impacts than spills of conventional oil, the Department has included provisions to reduce those risks, including working with the state of Nebraska to develop an alternative route that avoids much of the Sand Hills region, and incorporating mitigation measures recommended by both the Pipeline Safety and Hazardous Materials Administration and the independent engineering analysis. We note as particularly important the commitment by Keystone to be responsible for clean-up and restoration of groundwater as well as surface water in the event of a release or discharge of crude oil. These efforts will decrease the risk of spills and leaks, and provide for necessary remediation should spills occur. Nonetheless, the Final SEIS acknowledged that the proposed pipeline does present a risk of spills, which remains a concern for citizens and businesses relying on groundwater resources crossed by the route.”

Also in favor of approving the Keystone XL pipeline, the EPA makes note that the pipeline will result in fewer emissions than if Canadian crude is shipped by rail. “Based on that market analysis, the Final SETS concluded, in January of 2014, that if the Project were not approved, oil sands crude would be likely to reach the market some other way, most likely by rail. The Final SEIS acknowledged that the alternative of shipment by rail is more expensive than shipment by pipeline, and would therefore increase the costs of getting oil sands crude to market. 5 However, the Final SEIS concluded that given global oil prices projected at that time this difference in shipment costs would not affect development of oil sands, which would remain profitable even with the higher transportation costs of shipment by rail. Therefore, the Final SEIS concluded that although development of oil sands would lead to significant additional releases of greenhouse gasses, a decision not to grant the requested permit would likely not change that outcome, i.e., those significant greenhouse gas emissions would likely happen regardless of the decision on the proposed Project. This conclusion was based in large part on projections of the global price of oil." 

The Keystone XL pipeline promises efficiency as well as 43,000 jobs for Americans in this currently unforgiving employment market. It’s high time for it to be approved.

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IRS to Steal Tom Brady's Superbowl MVP Truck

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Posted by Ryan Ellis on Wednesday, February 4th, 2015, 12:36 PM PERMALINK


The world champion New England Patriots will celebrate with the city of Boston today in the now customary duck boat parade downtown.  It would be fitting if an IRS agent was waiting for quarterback Tom Brady at the end of the route.

Specifically, he might want to talk about Brady’s new truck.  You know, the 2015 Chevy Colorado he won as Super Bowl MVP. The same truck Brady wants to hand over to Patriots rookie cornerback Malcolm Butler, who won the Super Bowl on a last second interception.

The truck is considered a taxable prize under the Internal Revenue Code, section 74.  It’s taxed at Tom Brady’s marginal income tax rate of 39.6 percent (plus state income tax, but I’ll leave the focus on federal here).

According to TrueCar.com, the fair market value of a 2015 Chevy Colorado is in the neighborhood of $34,000.  This is likely an understatement, since it includes none of the options that Chevy no doubt added to the vehicle.

So Tom Brady will pay ($34,000 x 39.6 percent) in taxes, or $13,500 in income tax on this prize.

But the pain won’t stop there for the greatest quarterback in NFL history.

Don’t Forget About the Gift Tax, Tommy

According to ESPN, Brady has decided to gift the truck to Patriots rookie cornerback Malcolm Butler, who made the game-clinching interception on Sunday night.  This is not a taxable event at all for Butler–gifts are never taxed to the recipient.

Brady is not so lucky.  He’s going to have to pay gift tax on this transaction.  The tax code only allows you to give $14,000 tax free from any one person to any one person before assessing a donor level tax on the gift.

Assuming this will be Brady’s only gift to Butler this year, the transaction sets up a taxable gift for Brady of $20,000 (the $34,000 value of the truck minus the $14,000 gift tax exclusion).  Assuming Brady has made at least $1 million of taxable gifts up to this point in his life (a safe bet), he will owe a 40 percent gift tax on this $20,000 taxable gift.

That’s a $5000 gift tax on top of a $13,500 income tax on the truck, for a combined federal tax hit of $18,500.

That’s over half the value of the truck itself.

What About His Game Check?

Note that the above analysis is only for the federal income tax owed and gift taxes due on the MVP prize.  What about the paycheck Brady collected for winning the Super Bowl?

According to CNBC, the NFL pays a player on a Super Bowl winning team a salary of $97,000 for the game.  Brady doesn’t appear to have any Patriots team bonuses for the game, so this is likely the amount we’re dealing with.

Brady will face income tax at the top rate of 39.6 percent.  In addition, since this is a wage, he will also owe the top Medicare tax of 3.8 percent, half of which will be picked up by the NFL.  Put those together, and Brady will pay $42,000 in federal taxes on the game.

He didn’t get hit that hard by the Legion of Boom Seattle defense, but the IRS is a much bigger foe.

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Keith Allison

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marrmae1

BS! Doesn't matter how much he earned, he's the one who earned it, and you and your ilk have no claim to it! Period!

Phitness

Just to be clear: The guy makes $925,000 PER GAME this year, was paid $97,000 just for playing in the Super Bowl (collectively, playoffs paid out $165,000 for each player on winning team), and has a contract salary of $14.800,000 forTHIS YEAR alone....and you're complaining (on his behalf, mind you) about paying $18,500 on a FREE GIFT of $35,000? If Brady was living on food stamps and unemployed I'd hear your argument, but he makes millions, isn't a "job creator" and has never once complained himself about his wealth being taxed (you're doing it for him...which is odd).

Sorry, but where I come from, sharing a little bit of your free lunch while you're at a buffet isn't worth whining about.

Trialkat

Why bother to play hard and win. The more you win the more you lose! End the income tax, repeal the 16th Amendment, replace it all with a simple, visible retail sales tax as in H.R. 25/S. 155 and make winning count again!


Any Way You Slice It, the New York Bagel Tax Is Ludicrous

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Posted by Dorothy Jetter on Tuesday, February 3rd, 2015, 3:49 PM PERMALINK


In the Empire State, you can have a bagel just about any way you like it, but according to the state’s tax code, it’s going to cost you. In an attempt to relieve the state’s nearly $9.2 billion deficit in 2010, consumers have to pay 8 cents more for a bagel that is sliced

This illogical tax has had negative impacts on local business owners. In 2010, New York State discovered Kenneth Greene, owner of several Brueggers Bagels franchisees, was unknowingly not enforcing a tax on sliced bagels. 

According to Greene, “The bill they sent us for that is exorbitant. We hired an attorney.”  The business owner claims that the state has never acted on this law before, “We’ve been audited three or four times in the last 15 years and never once has this issue been raised.” 

As can be expected, Greene’s customers were not happy with the price increases of his products, Greene stated: "They felt we were nickel-and-diming them. They thought we were charging them to slice a bagel.”

But it was not Kenneth Greene’s choice to increase prices; he was forced to by the government.  Unsurprisingly, the tax code does not offer any clear cut explanation to this arbitrary fee.  The Wall Street Journal describes:

 “One source of confusion is that the rule isn't spelled out in the tax code. And while sliced bagels are subject to sales tax, a sliced loaf of bread at a bakery isn't, according to tax officials.”

 New Yorkers are also taxed for bagels with toppings. Legally speaking, putting cream cheese or butter on your morning breakfast reclassifies it from a bakery item to a restaurant item. The New York State tax code differentiates between items eaten in store or off the premises. To clarify, in order to be in compliance with law, business owners are supposed to tax customers based on where they eat the items sold to them. One businessman on Manhattan’s Upper East Side doesn’t buy into this notion. Sammy Abbas, store manager of Pick-A-Bagel, argued:

 “Why should I charge tax if a customer gets a croissant or a bagel with nothing on it, whether they eat it there or not? It’s not fair to customers.” 

Not only is this tax uninformed, it has not been universally applied. Florence Wilson, founder of Ess-a-Bagel in Manhattan does not pay this tax and in an interview with the Wall Street Journal said, "I hope they don't come after me for that."

The New York Times has claimed sales taxes, like this one, can “shift behavior in unintended ways especially if they are not applied uniformly across all goods.” The New York State tax on bagels is just another example of nanny state politicians interfering with how Americans live their lives.     

   

 

 
 
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Andy Z

Another good reason not to live in or go to New York


IRS Chief: "We Still Have Applications That Were Running When JFK Was President"

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Posted by Alexander Hendrie on Tuesday, February 3rd, 2015, 1:00 PM PERMALINK


At a Senate Finance Committee Hearing today, IRS commissioner John Koskinen testified on IRS funding requests for the upcoming fiscal year. Koskinen admitted that the IRS is stuck in the past when it comes to technology:

“Despite more than a decade of upgrades to the agency’s core business systems, we still have very old technology running alongside our more modern systems.”

Some of this software is so old that it is the same technology that was used in 1963, a full 52 years ago:

“In regard to software, we still have applications that were running when John F. Kennedy was President.”

In fact, Commissioner Koskinen stated that the IRS still uses a programming language — COBOL — that was considered obsolete 15 years ago. As his testimony stated, it is now difficult to find anyone with expertise in this programming:

“And we continue to use COBOL programming language. COBOL was considered outdated back when I served as Chairman of the President’s Council on Year 2000 Conversion and it is extremely difficult to find IT experts who are versed in this language.”

Taxpayers should be outraged that the IRS is still using technology that is more than 50 years old. But, the IRS is also taking unnecessary risk by not updating their technology. As Commissioner Koskinen testified:

“It is important to point out that the IRS is the world’s largest financial accounting institution, and that is a tremendously risky operation to run with outdated equipment and applications."

As ATR has previously pointed out, the IRS also refuses to produce legally required tax complexity reports and does not give taxpayers the option to leave phone messages when they call for assistance – even if they are elderly or have a disability.

Norquist: End the IRS Before it Ends US.

 

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Dan_Lef

Just one more reason to go to a flat tax and eliminate the need for thousands upon thousands of bureaucrats.

jetty

Thousands upon thousands of Democratic Party supporting bureaucrats.

Gino Schafer

Thousands upon thousands of government employees that live off taxpayer dollars.


ATR Supports Legislation to Prevent the IRS from Targeting Taxpayers Based on Political Ideology


Posted by Ryan Ellis on Tuesday, February 3rd, 2015, 12:03 PM PERMALINK


ATR supports several bills that will protect taxpayers from being targeted by the IRS because of their political beliefs or affiliation. We urge members of the U.S. House of Representatives and U.S. Senate to support this legislation.

The IRS has the power to designate groups as tax-exempt social welfare organizations provided they are primarily engaged in activities to promote the common good and general welfare of society. However their ability to impartially perform this responsibility has been called into question since it was revealed that they had inappropriately targeted conservative social welfare groups for scrutiny.  

S. 273, sponsored by Senator Ted Cruz (R-Texas) and H.R. 599, sponsored by Representative Paul Ryan (R-Wis.) would make it a criminal offense for any IRS employee to willfully discriminate against groups based on their political beliefs or any policy statements made.

S.283, sponsored by Senator Jeff Flake (R-Ariz.) would roll back the IRS standards of definitions for “social welfare organizations” to January 1, 2010. The bill will also suspend any IRS rulemaking in this area until 2017.

These bills will help protect taxpayers from future IRS overreach. In the wake of the IRS targeting conservative groups based solely on their ideology, this legislation is needed now more than ever.

 

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Employee

Please read the following 503(c) rules and tell me how many political groups period fall in this category? Plus what social benefit are they actually providing when they can't even do their jobs on the hill and pass bills? Why does the political organization need to be exempt? I'm sure like all the other laws that are implemented for their benefit this tax exempt status will allow them to not pay taxes anywhere, whether personal, private or for their supposed non-exempt entity. So when questions are asked by the IRS they are just doing their jobs to make this determination.

To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure
to any private shareholder or individual. In addition, it may not be an action
organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.

Section 501(c)(3) organizations are restricted in how much political and
legislative (lobbying) activities they may conduct. For a detailed
discussion, see Political and Lobbying Activities. For more information about lobbying activities by charities, see the article Lobbying Issues; for more
information about political activities of charities, see the FY-2002 CPE topic
Election Year Issues.


The Obama Budget's Double Taxation of U.S. Employers

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Posted by Ryan Ellis on Tuesday, February 3rd, 2015, 9:35 AM PERMALINK


President Obama released his FY 2016 budget yesterday. It contains dozens of tax increases that go on for page after page. Buried in there is a series of tax increases on U.S. employers who also do business abroad. Because the U.S. has a "worldwide" tax regime, any further U.S. taxation of overseas income represents a double tax on that income. By definition, these overseas profits have already faced taxation in the country where they were earned. The United States should instead move to a "territorial" tax system, where the IRS only taxes profits earned inside our borders. That's what the rest of the developed world does, and it's time to modernize the code to reflect current best practices.

Unfortunately, the Obama budget moves in the wrong direction in three key ways.

Immediate 14 percent tax on overseas earnings.  U.S. companies who earn money overseas have a problem. They have already paid taxes on these profits in whatever country they earned the money in. But if they try to bring their after-tax profits back to the United States, they face a double tax from the IRS. They have to pay the difference between the U.S. corporate income tax rate (which is over 39 percent when states are--properly--included), and the rate they already paid overseas (the OECD average is under 25 percent).

The Obama budget makes this problem even worse by slapping an immediate 14 percent tax (close to 20 percent when states are included) on all after-tax earnings overseas--whether the money ever comes back to the United States or not.

A much saner strategy would be to make this decision optional and beneficial for companies.  Back in 2005, companies could voluntarily bring back overseas after-tax corporate earnings with a small double tax of 5.25 percent.  When given this choice, over $300 billion came back that year alone.  In the absence of a territorial system, which would have no double taxation at all, U.S. policymakers should give strong consideration to another round of repatriation.

A new global minimum tax of 19 percent. Another provision in the Obama budget would say that companies have to pay a tax rate of 19 percent (really 24 percent when states are included) on their global profits.  This means that companies who do business in countries with the good sense to have low, internationally-competitive corporate income tax rates will be punished. This is a clear case of rich, developed, and bloated countries picking on developing countries in Eastern Europe and elsewhere who are trying to attract capital. American companies are merely being used as a football here.

A real territorial system would not care what the tax rate overseas is, since it would not concern itself with overseas profits. Trying to slap global minimum taxes around the world is a sure recipe for forcing companies out of the United States entirely.  Speaking of that...

New restriction on "corporate inversions."​ President Obama and Congressional Democrats like to rail against "corporate inversions" (when a U.S. company is bought out by a foreign company) in the same way an angry drunk objects to the bruises on his wife's face.  We have the worst corporate income tax system in the world.  We impose the highest marginal income tax rate in the world.  We force our companies to live under a totally insane worldwide tax regime which exposes their profits to all sorts of international double taxation.  We force companies to slowly deduct investments and double tax their equity, yet they can write off debt interest immediately.   It's the opposite of what you want to do if you want to attract jobs and capital to the United States.

​Yet the Obama budget makes it worse.  It changes tax rules so that if 50 percent or more of the shareholders in the acquired company were in the old company, the new business is treated as if it were domestic.  To translate that into English, it exposes these companies to full international double taxation, and potentially causes massive "exit taxes" on companies just trying to comply with a very punitive tax system.

The solution for "corporate inversions" is simple--fix the U.S. tax system so that we're inviting capital and jobs in, rather than pushing them out the door.

See also: 
Obama Budget Creates Second Death Tax

Obama Budget: Highest Cap Gains Tax Since 1997
 

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John (magnum)

"The Obama Budget's Double Taxation of U.S. Employers"

Odumbo and the dem-wit party are JOB KILLERS with taxation and excess regulations.

Fewer and fewer makers paying for the Odumbo takers.

This is just a continued attack on the middle class since companys do not actually pay taxes, but passes them along to consumers !

David Addams

Corporations will take very predictable actions in order to avoid these taxes.

The most obvious being to set up a holding corporation in another country and have that company own the corporations in the various countries in which they do business.

The U.S. company would be a subsidiary and would have no ownership rights in the other companies and therefore no claim to those companies' profits.

ToddTexas

The reality is this...businesses don't pay taxes...the people who buy products or use a service from a business pay its taxes. Anytime any tax is levied, we the people pay it...and that's how we should talk about it too.


ATR Opposes Cigarette and E-Cigarette Tax Hikes in North Dakota

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Posted by Paul Blair on Tuesday, February 3rd, 2015, 12:37 AM PERMALINK


With the rapid decline in oil prices over the past six months, states like Texas, Oklahoma, Alaska and North Dakota have seen adjusted revenue forecasts for 2015. While consumers saved $14 billion in 2014 due to lower gas prices, lower prices have also meant less tax revenue for a number of states. 

In the case of North Dakota, however, House Majority Leader Rep. Al Carlson is correct in noting that "the sky is not falling." Despite lower prices, oil extraction will not end, even if it slows. As such, calls for higher taxes are extremely premature, especially when they hit those most affected by any sort of economic slowdown: low and middle income residents.

Two bills up for debate this week in the North Dakota House and Senate call for raising taxes on cigarettes and other tobacco products (OTPs). Americans for Tax Reform president Grover Norquist sent a letter to the House and Senate Finance and Taxation Committees outlining ATR's opposition: 

Extensive research suggests that regressive cigarette taxes unnecessarily punish the poor without reducing smoking. Smokers often minimize the impact of tax increases like those proposed in HB1421 and SB 2322 by switching to lower price discount cigarettes, smoking fewer cigarettes more intensively, and seeking out low-or untaxed cigarettes, such as those available on Indian reservations. Even if use did decline, the state would not see the revenue anticipated by these tax hikes.

Targeted excise taxes have proven to be unstable sources of revenue, and ultimately can cause a reduction in tax receipts. Increasing the state's reliance on tobacco taxes by increasing them by as much as $1.56 per pack, as SB 2322 does, will not necessarily generate more revenue in the long term. In 2006, Chicago collected $32.9 million in cigarette taxes. After two consecutive tax hikes, revenue fell to $16.5 in 2013. When Illinois raised the cigarette tax by $1-per-pack in 2012, nearly doubling the state's tax rate to $1.98 per pack, the tax delivered $138 million less than expected. A reduction in tax receipts is a common occurrence amongst cities and states that attempt to discourage consumption with higher costs.

While the House and Senate bills do not single out electronic cigarettes, it is likely that amendments will be made that could subject these tobacco-free technology products to the OTP taxes imposed on products like snus. The letter notes: 

With e-cigarettes, the free market has provided a solution to a problem that social engineers have not been able to address through stiff government regulations. The imposition of tax hikes on innovative products that reduce smoking and people's dependence on tobacco cigarettes is misguided and will impede proven harm reduction methods.

Efforts to further reduce the income tax should continue to be the core focus of the North Dakota legislature. In the aftermath of the 1980's oil price collapse, Texas sought to aggressively diversify the state economy. The absence of an income tax lured thousands of businesses and taxpayers to the state from all over the nation. North Dakota should follow Texas, South Dakota, Wyoming, and the six other states that do not tax income so that it, too, can lure taxpayers and non-energy businesses fleeing from states like Illinois, California, and New York.

Proposals that seek to raise taxes should be rejected as unnecessary side shows, no matter their intended purpose. 

Click here to read the full letter. 

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Lisabelle

Excellent, to the point.


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