ATR Urges Repeal of BLM Methane Rule Under Congressional Review Act

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Posted by Justin Sykes on Monday, January 30th, 2017, 9:00 AM PERMALINK

Americans for Tax Reform this week released a letter to House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell urging Congressional lawmakers to use the authority granted under the Congressional Review Act to repeal the Bureau of Land Management's (BLM) Waste Production, Production Subject to Royalties, and Resource Conservation Rule - commonly referred to as the BLM Methane Rule. 

The letter expresses the concern that BLM not only lacks the statutory authority to enact the Methane Rule, but that the rule is also duplicative and wholly unnecessary. 

The letter can be viewed below or here:

January 30, 2017

The Honorable Paul Ryan
Speaker
U.S. House of Representatives
Washington, DC 20515

The Honorable Mitch McConnell
Majority Leader
U.S. Senate
Washington, DC 20510

 

Dear Speaker Ryan and Majority Leader McConnell:

On behalf of Americans for Tax Reform (ATR) I write to express ATR’s strong support for using the Congressional Review Act to repeal the Bureau of Land Management’s (BLM) Waste Production, Production Subject to Royalties, and Resource Conservation Rule – commonly referred to as the BLM Methane Rule.

The BLM Methane Rule is a product of federal regulatory overreach, released in the eleventh hour by the Obama Administration, serving only to preserve the former President’s legacy at the expense of responsible U.S. energy production.

BLM not only lacks the statutory authority to enact the Methane Rule, but the rule is also duplicative and wholly unnecessary.      

Under the Clean Air Act the Environmental Protection Agency (EPA), in conjunction with the states, is vested with the sole authority to regulate air quality. By releasing the Methane Rule, BLM is attempting to regulate air quality and has thus exceeded its statutorily granted authority.

It is also the case that EPA last year finalized rules to regulate methane emissions on top of existing state regulations. Thus the BLM’s rule is wholly duplicative and adds to an already substantial regulatory burden on American energy production.      

Furthermore, the Methane Rule is a regulation in search of a problem. Since 1990 natural gas production has increased by almost 50 percent, while methane emissions from oil and gas development have declined by over 20 percent thanks to advances in technology.

I urge you and your colleagues in Congress to use the authority granted under the Congressional Review Act to repeal the BLM’s Methane Rule.

Sincerely,                               

Grover G. Norquist                                                     

President                                                                     
Americans for Tax Reform

 

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Government-Owned Networks Drain Taxpayers

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Posted by Margaret Mire on Friday, January 27th, 2017, 10:44 AM PERMALINK

As soon as Wednesday, February 1, the Grand Junction City Council will be voting on a city-provided Internet plan. Americans for Tax Reform opposes this measure, and sent a letter to the council members urging them to vote against it. To view the letter, please click here.

January 27, 2017

To: Members of the Grand Junction City Council

From: Americans for Tax Reform

Re: City-Owned and Provided Internet Plan

Dear Members of the Grand Junction City Council,

On behalf of Americans for Tax Reform and supporters in Grand Junction, I urge you to oppose the city-provided Internet plan. This undertaking – estimated to cost $70 million tax dollars – would be an inappropriate and irresponsible use of scarce public resources.

More than 20 private Internet service providers currently serve the Grand Junction area, and have poured millions of dollars into their broadband infrastructure over the years. Thanks to their investments, 99% of residents living within the city limits can choose from 2 or more wired providers, and nearly all of them have access to Internet speeds significantly faster than the Federal Communication Commission’s recently reported national average. As such, a city-provided Internet service would be pointless.

In addition to being a waste of hard-earned tax dollars, city-provided Internet would also put taxpayers at risk for massive rate hikes. Indeed, dozens of examples nationwide have shown a clear pattern: government-owned broadband networks (GONs) quickly turn into money pits.

The construction and maintenance of broadband networks are not functions that government entities are well suited to take on, as they require regular and expensive upgrades in order to function properly. Too late in the game, government officials realize the cost for such a project was grossly underestimated, and that they lack the necessary resources and expertise to remain up-to-date in such a rapidly changing industry.

Along with underestimated costs, demand for GONs is often grossly overestimated. Despite access to a GON, consumers often do not see a need to change providers and choose to remain with their trusted private sector providers. Underestimated costs and overestimated demand is a recipe for deficits that taxpayers will be forced to fill. This scenario has played out in a number of cities and towns across the U.S.

Take Bristol, Virginia, for example, where a $130 million GON was built despite private providers already serving the area. At an $80 million loss to the taxpayers, the city is now selling this GON for just $50 million. A similar episode aired in Tennessee in 2007, when a $32 million GON in Memphis was sold for just $11.5 million – a $20.5 million loss to taxpayers and public utility customers. GONs in dozens of other cities, including Tacoma, Washington; Groton, Connecticut; and Burlington, Vermont, have all ended in a similar tragedy.

If you need more than a track record of debt and failure to oppose a city-provided Internet service, concerns with GONs stem beyond unsustainable short and long term costs to taxpayers. There are a slew of risks associated with governments tampering with the market.

GONs unfairly compete with private providers because government entities can subsidize costs with tax dollars, and thus charge consumers below the cost of service. Private sector providers cannot do this, because it would drive them out of business. This discourages private providers from expanding and investing in areas where GONs are present, as their odds of success are hindered by unfair competition from an entity that doesn’t need to turn a profit. Since it is vigorous competition between providers that spurs innovation, improves quality of service and drives prices down, GONs leave consumers at risk for fewer choices, outmoded technology and deteriorating service.

Americans for Tax Reform opposes GONs, and urges city council members to vote against the city-owned Internet plan. If you have any questions, or if ATR can be of assistance, please contact me or Margaret Mire, ATR’s state affairs coordinator, at mmire@atr.org or 202-785-0266.

Sincerely,

Grover Norquist

President

Americans for Tax Reform

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Norquist Praises Emerging Consensus on Tax Reform

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Posted by ATR on Thursday, January 26th, 2017, 4:51 PM PERMALINK

ATR president Grover Norquist released the following statement in response to remarks made today by White House Press Secretary Sean Spicer:

“Spicer just announced that border adjustability – once thought to be a sticking point for coming to agreement on fundamental tax reform – is now a consensus item. This statement means we are very close to enacting fundamental tax reform. The Trump team and congress have been moving towards each other for months. And this continues. So today’s comment about the wall was actually an extremely newsworthy story about how close we are to enacting fundamental tax reform  that creates jobs, increases wages, and promotes strong economic growth. The entire package is a dramatic reduction in taxes and therefore certainly not a violation of the Taxpayer Protection Pledge.”

 

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The Death Tax Should Be Repealed in 2017

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Posted by Natalie De Vincenzi on Thursday, January 26th, 2017, 12:38 PM PERMALINK

The Death Tax should be repealed this year as a part of much-needed, pro-growth tax reform. At its core, this tax is extremely unfair, forcing families to pay a tax on their loved one’s family-owned businesses or farms.

At a steep 40 percent rate, those hit by the Death Tax must give up a portion of their loved one’s legacy because of the tax. The truly wealthy can avoid the tax through an army of accountants, attorneys, and charitable planners, but those who are hit hardest generally are first and second generation small business owners and cannot afford the same tax avoidances the wealthy, like Hilary Clinton, use. Americans for Tax Reform along with 131 other organizations wrote a letter to Congress urging immediate and permanent repeal of the Death Tax.

Repeal of the Death Tax is not only common-sense, but it would also spur economic growth. In 2016, the Tax Foundation estimated that repeal of the Death Tax would create 150,000 jobs. Additionally, the  Joint Economic Committee reported that the Death Tax has suppressed over $1.1 trillion of capital in the United States’ economy since being introduced. Much of this comes from small businesses, who are the core of America’s economy. This loss of capital ultimately results in fewer jobs and lower wages for American workers.

In addition, the Death Tax contributes a miniscule amount of revenue relative to the size of federal government. In all, it makes up only one half of one percent of all federal revenue. Because the Death Tax is so economically destructive, almost all the revenue lost would be offset by increased economic growth. As noted by the Tax Foundation, repealing the Death Tax would result in $240 billion in lower taxes over a decade. However, the economic growth created by repealing the Death Tax would produce $221 billion in federal revenue because of increased wages and more jobs.

The majority of Americans oppose the Death Tax and support its repeal. Countless polls have proven that a majority of Americans would support full and permanent repeal of the Death Tax.  

Senator John Thune (R-S.D.) and Representative Krisiti Noem (R-S.D.). have introduced legislation, S. 205/ H.R. 631, The Death Tax Repeal Act of 2017, to permanently repeal the Death Tax. ATR urges all members of Congress to support and co-sponsor these bills. Likewise, executive and congressional leaders have been at the forefront of this debate. Both the House GOP tax blueprint and the plans released by President Trump have both called for the repeal of the Death Tax.  

As the President and Congress are moving forward with pro-growth tax reform, the repeal of the Death Tax should be a vital part of reform. 

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Free Market Groups Ask Congress to Rescind FCC Privacy Rules

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Posted by Katie McAuliffe on Thursday, January 26th, 2017, 12:00 PM PERMALINK

Americans for Tax Reform along with a coalition of other free market groups sent a letter to House and Senate Leadership asking them to use their Congressional Review Act Authority to rescind the FCC Privacy rules.

Please see the text of the letter below and a link to the letter on ATR's website here

January 26, 2017

The Honorable Paul Ryan
Speaker
U.S. House of Representatives
Washington, DC 20515

The Honorable Mitch McConnell
Majority Leader
U.S. Senate
Washington, DC 20510

The Honorable Nancy Pelosi 
Democratic Leader
U.S. House of Representatives
Washington, DC 20515

The Honorable Chuck Schumer
Democratic Leader
U.S. Senate
Washington, DC 20510

Dear Speaker Ryan, Majority Leader McConnell, Leader Pelosi and Leader Schumer:

We urge you to use the authority provided in the Congressional Review Act to rescind the Federal Communications Commission’s Broadband Privacy Order.

Congress is fully justified in rescinding these rules both because the Order lacks proper legal grounding and because of the need to ensure real consumer privacy across contexts of user experience.

The FCC’s approach is inconsistent with that of the Federal Trade Commission for nearly two decades, and will likely render harm unto consumers.

The FTC focuses on what data are held, the level of data sensitivity, and how consumers are affected if the data are misused. This outcomes-based approach takes consumers’ preferences into account while preventing actions that harm consumers.

The FTC’s approach rests on well-established standards of Unfairness (preventing substantial consumer injury) and Deception (enforcing material promises). Consumers generally agree on what constitutes financial and physical injury. Consumers deem data that could lead to these types of injuries more sensitive, and expect higher security for these data.

The sensitivity of other “private” information is, as the FTC rightly recognizes, often subjective, depending on its use. Some people might choose to post everything about themselves online — details that others might find invasive or embarrassing if made public — while others chose not to join social networks. Some might find value in an application using data about their geolocation in a particular way, while others decline participation because they consider the benefit of the service outweighed by its privacy cost. None of these approaches to privacy is incorrect. Each is a personal decision about tradeoffs. Taking varying consumer preferences into account, the FTC’s standards functioned reasonably well, requiring opt-out in most instances and opt-in only for particularly sensitive kinds of data.

The FCC approach focuses on who holds the data, rather than what — and how sensitive — the data are.  This hinders services that consumers want while failing to protect sensitive data across contexts.

The FCC's questionable ability to regulate privacy standards, and its narrow view on what constitutes privacy protection, make its rules counterproductive to actual consumer privacy protections. In contrast, the FTC's approach to privacy does a better job of balancing protection of consumers’ privacy online with economic incentives to innovate in consumer products and services.

There are many reasons for Congress to negate these rules: The legality of the Open Internet Order, which these rules are based on, is questionable; the FCC's expanded interpretation of customer proprietary network information from section 222 is incorrect, as it applies specifically to voice services; and sections 201, 202, 303(b), 316 and 705 of the Communications Act also do not give the FCC the authority to enter rules of this nature.

Rescinding the Privacy Order would promote both innovation and effective, consistent privacy protections in over-the-top, application, wireless and wireline markets. It would also send a clear signal that the FCC has lost its way in interpreting the statute Congress gave it. Doing so would not create a gap in privacy protection because the FCC would retain the ability to police privacy practices of broadband companies on a case-by-case basis.

If Congress fails to use the CRA in such a clear-cut case of agency overreach, the statute will fail in its original goal: encouraging regulatory agencies to respect the bounds of Congressional authority.

 Sincerely,

Americans for Tax Reform

Digital Liberty

American Commitment

American Consumer Institute

Caesar Rodeny Institute

Center for Freedom & Prosperity

Center for Individual Freedom

Competitive Enterprise Institute

FreedomWorks

Frontiers of Freedom

International Center for Law & Economics

Institute for Policy Innovation

The Jeffersonian Project

John Locke Foundation

Less Government

The Main Heritage Policy Center

NetCompetition

Oklahoma Council of Public Affairs

Small Business & Entrepreneurship Council

Taxpayers Protection Alliance

TechFreedom

 

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Changes to FTC Contact Lens Rule Promotes Free Market Competition

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Posted by Toni-Anne Barry on Wednesday, January 25th, 2017, 4:05 PM PERMALINK

ATR has sent the following letter in support of proposed changes to the Contact Lens Rule, 16 CFR Part 315, Project No. R511995:

On behalf of Americans for Tax Reform, I write in support of new changes to the Contact Lens Rule (16 CFR Part 315, Project No. R511995.) The proposed changes to the rule promote and protect the free market by ensuring consumers have the freedom to purchase where they choose free from interference.

In 2003, the Fairness to Contact Lens Consumers Act (FCLCA) was made into law in response to this issue. The act required that optometrists provide patients with a copy of their prescription.

Prior to passage of FCLCA, optometrists could make it more difficult for their patients to purchase from a third party. These concerns were far from hypothetical – there were many well documented cases of bad actors implicitly or directly blocking the free choice of consumers.

To be clear, there should be no restrictions on professionals selling contact lens, nor should there be any restriction on consumers safely purchasing from a third party. 

Since the rule has been enacted, patients have had more options on where to fill their prescriptions. FCLCA fixed existing flaws in law by allowing consumers the right to “passive verification” over contact lens prescriptions, a change that meant patients would have access to a written prescription, so they could shop where they wanted.

The newly proposed changes to the contact lens rule protect the successes from FCLCA introducing new provisions that will strengthen federal law.

The rule calls for additional record keeping in the form of a “receipt of contact lens prescription” that enshrines the right of consumers to freely purchase from either their optometrist or a third party provider.

Consumers will also have increased flexibility to have their prescriptions verified through phone, fax, or online, a change that makes sense given the ease of communication today.

Importantly, changes to the rule do not include some of the proposed changes that would restrict the free market. 

Critics of existing law have long argued that it is unsafe for patients to fill their prescriptions through a third party. These opponents have proposed regulations to the FCLCA such as allowing optometrists to block any third party from filling a prescription based on their own discretion and prohibiting automated verification that makes it easier and faster for patients to receive their prescriptions.

After a year-long examination the FTC has rightly debunked all safety issues that have been raised and decided that there is no basis for implementing these unnecessary regulations.

The new proposal will add to the success of existing law, promoting the well-being of patients and the free market. I urge the FTC to move forward with this rule and continue to reject any proposals that weaken contact lens consumer protections. 

Onward, 

Grover Norquist

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Top 5 Reasons to Repeal the Durbin Amendment

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Posted by Uzi Frydman on Wednesday, January 25th, 2017, 12:33 PM PERMALINK

Passed as part of the Dodd-Frank Act, the Durbin Amendment allows the government to set price controls on fees for debit card transactions. Before the Durbin Amendment, such fees were not capped, and issuers of debit cards, such as credit unions and banks, were encouraged by a competitive market to offer consumers benefits like reward programs and free checking accounts. Those days quickly faded as the days of Durbin ushered in a darker day for the consumer.

The Durbin Amendment must be repealed so that the consumers can once again enjoy the benefits of the free market.

Here are the top 5 reasons Durbin is failed policy and must be repealed.

1) Unfulfilled promises. The promise made to the consumer that they would receive the benefits of retailers receiving a fee break was never fulfilled. Recent studies show that most large retailers have seen significant cost reductions as a result of the Durbin Amendment, yet to date there is no evidence that those cost savings have been passed-through to consumers.” In fact, since Durbin was passed, 77% of merchants have not changed prices, and 22% have actually increased prices. 

2) Bring back free checking accounts. Credit unions and banks that would have normally received fees from the average debit card swipe are now receiving less and have been forced to cut out free checking accounts, something consumers enjoyed for years before Durbin came around. Before Durbin was enacted in 2009, 76 percent of banks offered free checking accounts. In 2011 that number fell to 45 percent, and in 2012 it plunged to just 39 percent.

3) Growth in America’s “unbanked” population. As a result of the decline in free checking accounts under the Durbin Amendment, many low-to-middle income Americans have been pushed out of the banking system. According to a recent study by George Mason University, the Durbin Amendment has led to over 1 million Americans being unbanked. A regressive trend that falls hardest on America’s poor.

4) The false revenue narrative. While proponents of the Durbin Amendment claim that issuers of debit cards have seen increased revenue since the amendment passed, this narrative is blatantly misleading. While there has been growth in total interchange fees, this is a result of expanded credit and debit card use in recent years – not a result of the Durbin Amendment. For instance, data shows that credit and debit purchases have increased to 46 percent of total consumption value, up from 37 percent in 2008.

5) Reward the consumer not the retailer. Finally, credit unions and banks have been forced to scale back and practically eliminate many forms of debit card reward programs. These programs are vital towards rewarding the consumer for stimulating the economy with their hard earned money.

In essence, the Durbin Amendment is failed policy. Since enactment, Durbin has failed consumers by not passing the savings on as promised, eliminated the ability of many consumers to have their money kept in bank accounts that charge monthly fees, and has led to an increase in unbanked Americans. The 115th Congress and President Trump should act to ensure the Durbin Amendment is repealed.

 

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Repeal of Obamacare Will Provide Much Needed Middle Class Tax Relief

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Posted by Alexander Hendrie on Tuesday, January 24th, 2017, 3:06 PM PERMALINK

At today’s Senate Finance Committee hearing for Tom Price to be Secretary of Health and Human Services, Sen. Claire McCaskill (D-Mo.) falsely claimed that repealing Obamacare’s 20 new or higher taxes would benefit “the rich.”

As further evidence of how ignorant Sen. McCaskill is about the contents of the law,Obamacare imposed roughly one trillion dollars ($1,000,000,000,000) in higher taxes over ten years that directly and indirectly hit middle class families and businesses.

The law imposes a tax for failing to buy government-mandated insurance, imposes taxes on the millions of Americans using Health Savings Accounts and Flexible Spending Accounts, imposes an income tax hike on Americans facing high medical bills, imposes a new tax on health insurance, a tax on medical devices, a tax on employer provided care, and a tax on innovative medicines and other treatments.

Repealing these taxes will provide much needed relief to the paychecks of families across the country. Repealing Obamacare will also undo Barack Obama’s broken promise not to sign “any form of tax increase” on any middle class American family.

Individual Mandate Non-Compliance Tax ($43.3 billion tax hike between 2016-2025)

Anyone not buying “qualifying” health insurance – as defined by President Obama’s Department of Health and Human Services -- must pay an income surtax to the IRS. In 2014, close to 7.5 million households paid this tax. Most make less than $250,000. The Obama administration uses the Orwellian phrase “shared responsibility payment” to describe this tax.   

Starting this year, the tax was a minimum of $695 for individuals, while families of four had to pay a minimum of $2,085.

 

Households w/ 1 Adult

 

Households w/ 2 Adults

Households w/ 2 Adults & 2 children

 

2.5% AGI/$695

 

2.5% AGI/$1390

2.5% AGI/$2085

A recent analysis by the Congressional Budget Office (CBO) found that repealing this tax would decrease spending by $311 billion over ten years.

Medicine Cabinet Tax on HSAs and FSAs ($6.7 billion tax hike between 2016-2025)

Since 2011 millions of Americans are no longer able to purchase over-the-counter medicines using pre-tax Flexible Spending Accounts or Health Savings Accounts dollars. Examples include cold, cough, and flu medicine, menstrual cramp relief medication, allergy medicines, and dozens of other common medicine cabinet health items. This tax costs FSA and HSA users $6.7 billion over ten years.

Flexible Spending Account Tax ($32 billion tax hike between 2016-2025)

The 30 - 35 million Americans who use a pre-tax Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs face an Obamacare-imposed cap of $2,500. This tax will hit Americans $32 billion over the next ten years.

Flexible Spending Account Tax ($32 billion tax hike between 2016-2025)

The 30 - 35 million Americans who use a pre-tax Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs face an Obamacare-imposed cap of $2,500. This tax will hit Americans $32 billion over the next ten years.

Before Obamacare, the accounts were unlimited under federal law, though employers were allowed to set a cap. Now, parents looking to sock away extra money to pay for braces find themselves quickly hitting this new cap, meaning they have to pony up some or all of the cost with after-tax dollars. Needless to say, this tax especially impacts middle class families.

There is one group of FSA owners for whom this new cap is particularly cruel and onerous: parents of special needs children.  Families with special needs children often use FSAs to pay for special needs education. Tuition rates at special needs schools can run thousands of dollars per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. This Obamacare tax increase limits the options available to these families.

Health Insurance Tax ($130 billion tax hike between 2016-2025)

In addition to mandating the purchase of health insurance through the individual mandate tax, Obamacare directly increases the cost of insurance through the health insurance tax. The tax is projected to cost taxpayers – including those in the middle class – $130 billion over the next decade. 

The total revenue this tax collects is set annually by Treasury and is then divided amongst insurers relative to the premiums collected from certain plans each year. While it is directly levied on the industry, the costs of the Obamacare health insurance tax are inevitably passed on to small businesses that provide healthcare to their employees, middle class families through higher premiums, seniors who purchase Medicare advantage coverage, and the poor who rely on Medicaid managed care.

According to the American Action Forum, the Obamacare health insurance tax will increase premiums by up to $5,000 over a decade and will directly impact 1.7 million small businesses, 11 million households that purchase through the individual insurance market and 23 million households covered through their jobs. The tax is also economically destructive – the National Federation for Independent Businesses estimates the tax could cost up to 286,000 in new jobs and cost small businesses $33 billion in lost sales by 2023.

Chronic Care Tax ($35.7 billion tax hike between 2016-2025)

This income tax increase directly targets middle class Americans with high medical bills. The tax hits 10 million households every year. Before Obamacare, Americans facing high medical expenses were allowed an income tax deduction to the extent that those expenses exceeded 7.5 percent of adjusted gross income (AGI). Obamacare now imposes a threshold of 10 percent of AGI. Therefore, Obamacare not only makes it more difficult to claim this deduction, it widens the net of taxable income. This income tax increase will cost Americans $40 billion over the next ten years.

According to the IRS, approximately 10 million families took advantage of this tax deduction each year before Obamacare. Almost all were middle class: The average taxpayer claiming this deduction earned just over $53,000 annually in 2010. ATR estimates that the average income tax increase for the average family claiming this tax benefit is about $200 - $400 per year.

“Cadillac Tax” -- Excise Tax on Comprehensive Health Insurance Plans ($87.3 million tax hike between 2016-2025)

In 2020, a new 40 percent excise tax on employer provided health insurance plans is scheduled to kick in, on plans exceeding $10,200 for individuals and $27,500 for families. According to research by the Kaiser Family Foundation, the Cadillac tax will hit 26 percent of employer provided plans and 42 percent of employer provided plans by 2028. Over time, this will decrease care and increase costs for millions of American families across the country. 

HSA Withdrawal Tax Hike ($100 million tax hike between 2016-2025)

This provision increases the tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.

Ten Percent Excise Tax on Indoor Tanning ($800 million tax hike between 2016-2025) 

The Obamacare 10 percent tanning tax has wiped out an estimated 10,000 tanning salons, many owned by women. This $800 million Obamacare tax increase was the first to go into effect (July 2010). This petty, burdensome, nanny-state tax affects both the business owner and the end user. Industry estimates show that 30 million Americans visit an indoor tanning facility in a given year, and over 50 percent of salon owners are women. There is no exception granted for those making less than $250,000 meaning it is yet another tax that violates Obama’s “firm pledge” not to raise “any form” of tax on Americans making less than this amount.

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Tax Reform Must Retain Carried Interest As A Capital Gain

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Posted by Alexander Hendrie on Tuesday, January 24th, 2017, 8:00 AM PERMALINK

As President Trump and Congress ramp up discussions on what comprehensive tax reform should look like, they ought to be able to agree that reducing, not raising, the tax burden on badly-needed investment is a top priority. That's the opinion of two of Washington's most prominent taxpayer groups, which today urged leaders on both ends of Pennsylvania Avenue to get an early start on publicly declaring tax-reform principles that encourage investment, among them ensuring that all types of capital gains are treated fairly, without harsh or discriminatory exceptions in the law. 

Grover Norquist, Founder and President at Americans for Tax Reform, and Pete Sepp, President of National Taxpayers Union, offered the following statement ahead of GOP's policy retreat, where tax reform is expected to be the topic of in-depth discussions:

"The next four years represents an opportunity to reduce -- not increase taxes on capital gains. Over the past eight years, the top rate increased from 15 percent to 23.8 percent, and the top integrated rate currently sits at 56.3 percent compared to the OECD/BRIC average of 40.3 percent. 

While it appears unlikely that incoming lawmakers and the administration will increase rates outright, they should also be sure not to incrementally move the needle toward higher capital gains taxes in other ways, like boosting taxes on carried interest capital gains.

Carried interest capital gains income is earned through a net gain within a partnership formed between individuals with capital and an expert investor. They are indistinguishable from any other type of capital and so they are paid at the same capital gains tax rates. 

While supporters of higher taxes on carried interest capital gains say it takes aim at 'hedge fund guys,' it would also hurt pension funds, charities, and colleges that depend on these investment partnerships as part of their savings goals. In addition, small businesses would find themselves increasingly shut out from investment money available to them from these partnerships.

Rather than supporting proposals that lead to higher capital gains tax rates, the incoming Congress and administration should look toward lower rates. One model to follow is contained in the House GOP blueprint, which reduces the top rate on capital gains to 16.5 percent."

ATR is a nonpartisan taxpayer advocacy group, and sponsors the Taxpayer Protection Pledge. NTU is a pro-taxpayer lobbying organization working for lower, simpler taxes and economic freedom at all levels.

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ATR Urges Ind. Lawmakers to Reject Cigarette and Gas Tax Hikes

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Posted by Miriam Roff on Monday, January 23rd, 2017, 9:52 PM PERMALINK

In a recent letter, Americans for Tax Reform urged Indiana lawmakers to reject measures being pushed by Republican House Speaker Brian Bosma that would raise the state gas and cigarette tax.

Not only are these tax increases a misguided approach to budgeting, they also set the stage for more tax hikes down the road. The last thing hardworking families and employers across Indiana need is to have lawmakers in Indianapolis restrict their economic mobility by piling on more tax hikes at the state level.
 
You can view the letter here and below: 
 

To: Members of the Indiana Legislature

From: Americans for Tax Reform

Re: 2017 Legislative Session

Dear Members of the Indiana Legislature,

The coming year looks to be one of historic policy change, not just in Washington, but also state capitals across the country. On behalf of Americans for Tax Reform and our supporters across Indiana, I write today to urge you to keep taxpayers in mind as you take up many important issues during the 2017 legislative session. Any and all tax hikes will be scored as violations of the Taxpayer Protection Pledge, a personal written commitment many state lawmakers have made to their constituents to oppose net increases in taxes.

Your constituents have been hit with over 20 federal tax increases over the last eight years. The last thing individuals, families, and employers across Indiana need is to have lawmakers in the Indianapolis pile on with further tax hikes at the state level.

There is ample evidence that higher taxes make states less competitive, and harm economic growth. John Hood, chairman of the John Locke Foundation, a non-partisan think tank, analyzed 681 peer-reviewed academic journal articles dating back to 1990. Most of the studies found that lower levels of taxes and spending correlate with stronger economic performance. When Tax Foundation chief economist William McBride reviewed academic literature going back three decades, he found “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”

Unfortunately, potential tax hikes are already looming in the state and your colleagues are openly endorsing them. Earlier this month, not only did Speaker Bosma publicly tout a $0.10 gas tax hike, he’s supporting a gas tax increase for a second year in a row. The plan, like last year’s bill, only focuses on raising taxes, not reforming government or reallocating currently collected resources. As such, I urge you to reject this misguided approach to budgeting.

If transportation funding were truly a priority, lawmakers would immediately use gas tax revenue for its intended purpose: roads—rather than wait until 2019, as the plan proposes.  By claiming a tax hike is needed for transportation, lawmakers are admitting that transportation needs are actually their lowest priority; otherwise they would not have funded everything else first. As such, legislators should immediately and permanently codify the earmarking of gas tax revenue to new and existing transportation projects.

Accountability is also an integral part of the legislative process and voters demand it. Yet, as the plan stands, it violates voter wishes by allowing the gas tax rate to increase automatically every year. When lawmakers place tax hikes on autopilot, they strip from the budget process the responsibility and accountability that come with annual decisions about tax rates. A 2015 national public poll found that 79 percent of Americans oppose an increase in the gasoline tax to keep up with inflation and 68 percent oppose any increase in the gas tax to spend more for infrastructure.

Contrary to popular belief, the gas tax is not a user fee. Consumers must be presented with a choice of either purchasing the service from the government (by paying the fee) or purchasing the services from a private business to qualify as a true user fee. Because anyone who purchases gasoline in Indiana is forced to pay the tax, they are not considered user fees. Gas tax increases are tax increases in the same way that income and sales tax increases are. Road tolls, however, are an example of user fees. Tolls are user fees because commuters have the option of using the roads they are imposed upon or not.  

An additional object of consideration is an increase in the state cigarette tax. Increasing the Hoosier State’s dependence on tobacco taxes by increasing them will not guarantee more revenue in the long run. As demonstrated by many states and cities across the nation, targeted excise taxes have proven to be unstable sources of revenue, and ultimately result in a decrease in tax receipts. For example, neighboring Illinois nearly doubled its cigarette tax in 2012 by raising the tax $1-per-pack; it generated $138 million less than projected. In fact, only three out of the 32 state tobacco tax increases, enacted between 2009 and 2013, have met or exceeded tax revenue projects.

Currently, Indiana has a regionally competitive cigarette tax rate of $.995-per pack. It is higher than Kentucky’s $.60-per pack tax but makes Indiana a net exporter of cigarettes to states like Illinois, which boasts the city with the highest state-local tax rate of $6.16-per pack in Chicago. 

If enacted, this tax would likely further incentivize cigarette smuggling and cross-border sales into states like Kentucky. According to the Tax Foundation, when Illinois almost doubled the cigarette tax rate, cigarette smuggling rate dramatically increased from 1.1 percent to 20.9 percent in the first year. Consequently, small businesses in this state lost tens of thousands of dollars as patrons pursued cigarettes in less expensive markets across state lines, including in Indiana.

Targeted and regressive tax hikes on low-income consumers like smokers are unwise and will prove to be an unstable source of revenue long term.

If you need another reason to not raise taxes, which is what lawmakers do instead of reforming government, there is a good chance that federal tax reform will finally happen this year, and that it will include either a significant scaling back or outright elimination of the state & local tax deduction. The federal government has been subsidizing state tax hikes and high tax states for far too long, but the 115th Congress is looking to put an end to that.

Now that hardworking Hoosier families can finally afford to fuel their cars and heat their homes, legislators should not strip them of economic opportunity by making gas increasingly unaffordable and burdening the middle class and low-income families with more tax hikes. ATR will be educating your constituents and all Indiana taxpayers as to how lawmakers in state capitals vote on important fiscal and economic matters throughout the legislative session.

Please look to ATR to be a resource on tax, budget, and other policy matters pending before you. If you have any questions, please contact Miriam Roff, State Affairs Coordinator, at (202) 785-0266 or mroff@atr.org.

Sincerely,

Grover Norquist

President, Americans for Tax Reform

Photo Credit: 
Mr. Nixter

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