Tax Foundation: Hillary Tax Hikes to Cost More Than 300,000 Jobs

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Posted by Alexander Hendrie on Wednesday, January 27th, 2016, 4:41 PM PERMALINK

Hillary Clinton’s tax proposals will lead to lower wages, less jobs, and will reduce GDP, according to a recently released analysis by the Tax Foundation. In addition, her plan to date will likely fall hundreds of billions short of raising the revenue she hopes. The study was authored by Kyle Pomerleau and Michael Schuyler.

According to the analysis, Clinton’s proposals will increase federal revenue by $191 billion over the next decade, far below the more than $1 trillion her campaign claims. The lower than advertised revenue is due to the drastically reduced economic output that her tax hikes will cause.

Most notably, Clinton’s proposal to raise capital gains taxes will decrease revenue by as much as $409 billion, when dynamically scored.

In addition, the Tax Foundation estimates Clinton’s proposals will reduce GDP growth by one percent (equivalent to $178 billion based on 2015 GDP), reduce wages by one percent, and cost 311,000 full time jobs.

The Clinton campaign has failed to release specific details for many of her proposals, so it is likely her full list of tax hikes will have an even more drastic effect on the economy.

Because of this, the Tax Foundation’s analysis did not analyze the costs of Clinton’s proposed “Exit tax” on corporate inversions, her undefined business tax reform that her campaign claims will raise $275 billion, and her tax on stock trading.  

The Tax Foundation’s estimates of Clinton’s tax hike proposals can be found below:


Cost (over ten years)

Enact "Buffett Rule" 30 Percent Minimum Tax on Millionaires

$209 Billion

4 Percent Surtax on Taxpayers with Incomes over $5 Million

$95 Billion

Restore Estate Tax to 2009 Parameters

$76 Billion

Eliminate Deduction for Reinsurance Premiums Paid by Businesses

$2 Billion

Cap the Tax Value of Itemized Deductions at 28 Percent

$218 Billion

Adjusts the Schedule for
Long-Term Capital Gains

-$409 Billion


$191 Billion


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R Street Institute Grades 50 US Cities on Transportation Regulations

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Posted by Dennis Cakert on Wednesday, January 27th, 2016, 10:01 AM PERMALINK

In R Street Institute’s new study “Ridescore 2015: Hired Driver Rules in U.S. Cities” researchers Andrew Moylan and Zach Graves evaluate the regulatory environments for vehicle-for-hire services in 50 of the largest U.S. cities. The study is the first to compare different policies following the emergence of transportation network companies (TNCs) such as Uber and Lyft.  

Despite some cities originally adopting a “ban first, ask questions later strategy”, the findings in Ridescore 2015 point towards “consistent, albeit modest, improvement. Of the 50 cities in our analysis, 29 improved their scores this year, while only one earned a significant double digit drop.”

A city earns a score between 0-100 based on how it regulates TNCs, taxis and limo services:

“When all three subgrades are combined, it yields an overall ‘Ridescore’ for each city that approximates the friendliness of its transportation regulation. Forty percent of this score is derived from a city’s treatment of TNCs, 40 percent from its approach to taxi regulation, and 20 percent from its limo rules”

TNC regulations are judged based on answers to the following three questions:

           1) Can TNCs operate legally within the city?

           2) How hostile is the city’s regulatory framework for TNCs?

           3) Are the city’s insurance requirements disproportionately high?

30 out of 50 cities improved their TNC score “owing to the proliferation of largely reasonable ridesharing bills across the country” leading the researchers to say “it’s not unreasonable to project that every state will have a statute on the books by the end of 2016.”

Seattle is the only city to decrease its TNC score by double digits:

“The city that saw the biggest drop in its TNC-friendliness score was Seattle, which fell 17 points from 100.0 to 83.0. The Emerald City was a success story last year… Unfortunately, that success was undermined this year with the city’s subsequent imposition of a questionable “knowledge test” for TNC drivers, new fees on all TNC rides, and a nascent effort to unionize drivers for the first time. Combined with the city’s previous efforts (later vacated) to cap the total number of TNC drivers to just 150 (in a city with a population of more than 650,000) Seattle received a 15-point deduction for hostility… Seattle’s final score put them 38th nationwide in TNC friendliness, after placing first last year.”

In contrast, regulations for taxis remained almost completely unchanged:

“Unfortunately, successful efforts to craft and implement appropriate TNC regulations across the country have not, to date, generally been accompanied by commensurate efforts to liberalize the often-onerous rules governing taxi markets. Cities’ median score for taxi friendliness in this year’s report was 75.0, nearly unchanged from the 74.7 we recorded last year.”

The same is true for limos:

“Much as in the taxi-friendliness category, the picture of limo friendliness is little changed from last year. In 22 cities, there was no change in score, while six others saw changes of less than one full point. Another 19 cities saw modest movements of less than 10 points, generally reflecting small changes on two components that measure insurance requirements. As a result, both the average score and standard deviation are essentially unchanged from 2014.”

The study is an invaluable resource for tracking nationwide responses to the emergence of ridesharing platforms.  The researchers hope the analysis can “provide state, county and city lawmakers with a road map to a system of simple, fair and modest regulation that will allow transportation services of all types, including those not yet envisioned, to flourish.”

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ATR Urges Senate to Ban Internet Access Taxes

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Posted by Cecelia Mitchell on Tuesday, January 26th, 2016, 4:35 PM PERMALINK

Last week, on Thursday, Jan.  21, Americans for Tax Reform joined more than 40 organizations in a letter supporting Internet freedom.  The letter, to Senate Majority Leader Mitch McConnell and Senate Minority Leader Harry Reid, expressed strong support for including the Internet Access Tax Ban in H.R. 644, the Trade Facilitation and Trade Enforcement Act.

The internet is a necessity of modern life that must remain tax free in order for the economy to flourish.

Americans for Tax Reform is one of the over 40 organizations that signed the letter. In the past ATR President Grover Norquist has shown his support for keeping the internet tax free. Norquist stated in his own letter to the Senate “making the ban on Internet Access Taxes Permanent is a tremendous victory for all taxpayers.  Thank you for including the Internet Tax Freedom Forever Act (ITFFA) in the Trade Facilitation and Trade Enforcement Act of 2015.”

Digital Liberty Executive Director Katie McAuliffe has also previously released statements on the importance of keeping the internet tax free. McAuliffe stated, “legislators have actually held hostage a vote on the Internet Tax Freedom Forever Act.  This legislation would make the current Internet Tax Moratorium permanent, ending any possibility of states taxing Internet access, and ensure that there are no discriminatory taxes on e-commerce.  But the powerful interests have blocked the bill unless and until some kind of online sales tax is attached to it.”

Hopefully the letter sent to Senate Majority Leader Mitch McConnell and Senate Minority Leader Harry Reid will show the strong bipartisan support for this issue. 

Take Action! To show your support for keeping the internet tax free click here.


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Bernie's Big Government Tax Plan

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Posted by James Morrone on Tuesday, January 26th, 2016, 3:06 PM PERMALINK

As we all know, Bernie Sanders is a declared Socialist with very blunt intentions of raising taxes for everyone. He recently displayed his tax plan if he is elected.  Shockingly enough, there are significant increases across the board. The goal of the plan is to fully cover the costs of his single-payer healthcare plan that he claims would cost $1.4 trillion, with others claiming it would cost up to $2.8 trillion. His tax plan only is supposed to bring in $1.4 trillion annually, leaving a massive deficit of $14 trillion over a span of ten years.

To begin, Sanders’s proposal leads with an increase of the income rate to 52% for the top tax bracket. Included in this plan would be increases in all of the tax brackets, not only the ones for the wealthier Americans. This is due to his new tax on healthcare premiums of 2.2% that will force another unaffordable tax upon American households.  In fact, only those making $28,800 or less will be exempt, leaving whopping total of 74% of the households paying higher taxes. 

Unfortunately, he continues with this tax extravaganza with a new payroll tax of 6.2% that would be applied to employers. A very big caveat is the understanding of the effects of such a tax would have on wages and workers. By this, it means that the wages could either decrease or stay stagnant, even though Sanders’s claims that workers will be taking home 6% more after taxes. I’m going to put my money on the economists over the socialist on this one.

And that still is not all either, he continues to increase the capital gains and the death tax too. Under his plan, capital gains will now be subject to an increase from 23.8% to 52%, a gross increase. There is already a current problem with the double taxing of capital gains and will only harm further business endeavors and economic growth. 

It makes sense though, a socialist tax plan to pay for a socialist healthcare system.  This tax will only hamper economic growth in a still fragile economy whilst at the same time slamming the ever evaporating middle class with new taxes that they cannot afford, specifically, over $1 trillion dollars in new taxes levied against the American people to fund his flawed agenda.  

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people making under 28,000 are exempt from an increase in taxes. Good! 74% of american's will have an increase in taxes but won't have to pay high out of pocket expenses to go see the doctor or to attend college (a new age necessity). Good! Clearly this is from the perspective of a person who is still on their parents health care plan and lacks real-life POV's.

Mercatus Study Shows Sharing Economy Promotes Economic Inclusion

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Posted by Dennis Cakert on Monday, January 25th, 2016, 12:46 PM PERMALINK

Christopher Koopman, research fellow at The Mercatus Center at George Mason University, demonstrates in his study “Evaluating the Growth of the 1099 Workforce” how the sharing economy is key to promoting economic inclusion.

Using employment data from the IRS for the past 20 years, Koopman shows the rise in independent contractors predates the creation of sharing economy giants Uber, Lyft and Airbnb by at least eight years. Rather than view the sharing economy as the cause of the rise in independent contracting, the data shows that the weakening of the labor market over the past few decades has created a supply of people looking for additional means of income. Uber, Lyft, Airbnb and other sharing platforms are providing flexible, alternative opportunities for people who need it the most:

“We should view the rise of the sharing economy as a natural consequence of more fundamental changes in the labor market, and should count that as one of the many ways that the sharing economy is creating value. As traditional labor market dynamism wanes, firms and workers have adopted more flexible, nontraditional work arrangements as a response. Insofar as sharing-economy firms provide innovative and efficient ways to implement and manage those nontraditional arrangements, they are promoting economic inclusion for workers who now find fewer opportunities in the traditional labor market.”

This study and the rest of Koopman's invaluable research on the sharing economy can be found at


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Efforts to Raise Taxes on Electronic Cigarettes Persist in 2016

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Posted by Paul Blair on Monday, January 25th, 2016, 12:40 PM PERMALINK

One year ago this week, ATR's Patrick Gleason and I outlined the threat electronic cigarettes and vapor products faced during the 2015 state legislative sessions over new and higher taxes. At the conclusion of last year, state governments considered legislation to subject these new technology and tobacco-free products to excise or "sin" taxes in half the country and the District of Columbia. This was up from 15 the year prior, in 2014. 

As we explained, "Where some see a new technology that is helping people quit smoking, cash-hungry politicians see a new target to tax."

Contrary to claims by some, the fight to tax, and in many cases, regulate this new product category has never been about public health. In a piece for National Review, ATR president Grover Norquist and I outlined the fraud of such justifications for the prohibitionist movement against vapor products. 

"The same people who spent years demonizing smokers and cigarettes turned around and gleefully pushed for new programs and spending projects with the revenue they were able to extract from consumers... Budgets, though, rely on this significant revenue stream. Here the fraud that has always been the public-health push for cigarette taxes is exposed, in their quest to tax e-cigarettes out of existence."

Related: Grover Norquist Speech in New Orleans: The Vaping Movement Will Win! 

These legislative threats have always been about protecting the government's stream of sin tax revenue extracted from smokers. Every price increase on vapor products provides a reason for a smoker to not make the switch to healthier alternatives. This is exactly what some money-hungry legislators want. 

So what about 2016? As state legislative sessions heat up, so too have efforts to raise taxes on electronic cigarettes. Below is a map showing which states currently subject the products to excise, or sin, taxes and states where legislation has been filed or defeated as well. Click here for a larger version of the map. 

Legislation to raise taxes on electronic cigarettes has already been filed in Alaska, Hawaii, Iowa, Kentucky, New Jersey, New Mexico, New York, Virginia, Washington, and West Virginia. A ballot initiative is pending in California. More legislation is likely to be filed in the coming days and weeks. 

Four states and the District of Columbia currently impose an excise tax on e-cigarettes and vapor products. They include Minnesota (95% wholesale), North Carolina (5 cents per mL), Louisiana (5 cents per mL), and Kansas (20 cents per mL).

CDC Data: More than 9 Million Adult Consumers Regularly Use Vapor Products

Five localities also impose an excise tax on the products. They include Cook County, Illinois (20 cents per mL), Chicago, Illinois (55 cents per mL), Montgomery County, Maryland (30% wholesale), Juneau, Alaska (45% wholesale), ad Matanuska-Susitna, Alaska (55% wholesale). The mayor of Mat-Su actually vetoed the City Council's tax increase, only to have it overridden on a 5-2 vote soon after.  

E-cigarettes are at least 95% less harmful than traditional combustible cigarettes. Efforts to raise taxes on these smoking cessation devices work at cross purposes with efforts to cut down on the harm associated with smoking. This is one of the reasons we at Americans for Tax Reform oppose efforts to raise taxes on the products.

Click here for a PDF version of the state tax map. 

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Paul Hobson

They could not care less about Americans health it is all about the money!


"Four localities also impose an excise tax on the products. They include Cook County, Illinois
(20 cents per mL) Montgomery County, Maryland (30% wholesale), Juneau,
Alaska (45% wholesale), ad Matanuska-Susitna, Alaska (55% wholesale). The mayor of Mat-Su actually vetoed the City Council's tax increase, only to have it overridden on a 5-2 vote soon after. "

Don't forget Chicago :)

Free Trade Agreements Must Protect Rule of Law Equally

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Posted by Alexander Hendrie on Friday, January 22nd, 2016, 12:19 PM PERMALINK

Within the thousands upon thousands of pages of the Trans-Pacific Partnership trade agreement exists an important provision known as investor-state dispute settlement (ISDS). ISDS was created as a “neutral, international arbitration procedure,” and was designed to act as a safeguard to ensure that countries do not skirt their responsibilities toward free, open trade.

This procedure helps ensure rule of law is protected and enforced in the agreement by allowing companies investing in a foreign country to seek redress before an impartial court.

Unfortunately, as the TPP is written, this important protection is not available to all. Based on “public health,” the Obama administration demanded tobacco companies be excluded from receiving due process rights under ISDS.

In reality, the exclusion has nothing to do with public health at all – it could also exclude electronic cigarette and vapor products, which are increasingly used as smoking cessation tools for traditional cigarette users. Instead, the “carve-out,” as it is known, has more to do with the administration’s opposition to the tobacco industry.

The administration’s insistence on including this provision in TPP probably comes at the expense of other provisions that actual benefit American industries and jobs, given they would have prioritized this over issues that actual benefit Americans.

Effectively this carve-out sets the precedent that nation-states have the authority to exempt entire industries from access to legal redress that should be guaranteed to all. While the industry may be unpopular amongst some, it is perfectly legal and so there is little justification for this carve-out.

Perhaps worse, this carve-out is exceptionally vague, and therefore open to abuse. Within the text, there is no qualifying standard that countries must meet to exclude the tobacco industry. Instead the provision is largely self-executing, meaning a country can impose protectionist regulations as long as they are somewhat related to production or consumption of the product.

Ideally, free trade should be about eliminating barriers to free global commerce by removing discriminatory tariffs, trade quotas, and regulations.

Regrettably, the carve-out is not the only provision that takes the TPP in the wrong direction. For one, there are very real concerns that weak IP protections for biopharmaceuticals will impose harsh new costs that reduce medical innovation and access to important new medicines. In addition, the exclusion of the financial services industry from rules protecting data may drastically reduce their ability to safeguard vital, sensitive data, while imposing unnecessary costs on American business. Finally, the U.S. exportation of labor regulations within the TPP could very well increase the costs of trade, and again hurt U.S. jobs and business.

Even with these problems, the agreement is not all doom and gloom. The TPP contains as many as 18,000 tax cuts on American exports, and over the next decade the agreement cuts $15 billion in tariffs – taxes on trade – which will significantly reduce government interference in international commerce. Real income benefits to the U.S. economy could be as high as $77 billion a year, according to an estimate by the Peterson Institute for International Economics. 

For free trade to work, there simply cannot be discrimination that denies investors due process protections based solely on the political ideology of one country, or the unpopularity of a product. The ISDS tobacco carve-out has no place in a true free trade agreement.

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Meanwhile, in the States...

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Posted by Emily Leayman on Friday, January 22nd, 2016, 11:36 AM PERMALINK

While there is gridlock on the tax front in Washington, there are many developments in state capitals across the country that affect taxpayers. 

Below is a roundup of state tax activity from this past week:

Arizona: Arizona lawmaker wants cap on corporate tax credits for tuition donations. Bill proposes a tax credit for concealed carry permits.

California: Department of Transportation considers replacing gas tax with mileage fees. Gov. Brown asks for health care tax while GOP, unions fight for higher funding for disabled.

Delaware: Delaware House approves corporate income tax changes.

Florida: Florida House in support of Gov. Scott’s $1 million in tax cuts. Legislature seeks to end the corruption tax.

Idaho: Lawmakers doubting whether Gov. Otter’s budget includes tax cuts.

Illinois: Hospital property tax exemptions on hold after court action.

Indiana: House committee approves gas, cigarette tax hikes for road funding.

Iowa: $10 million biochemical tax credit plan unveiled in Iowa Senate.

Kansas: Kansas loses tax revenue from grocery shopping out of state.

Kentucky: State Senate president predicts tight budget.

Maine: Legislature tries to reverse $3 million in taxes on veterans.

Maryland: Gov. Hogan (R) clashes with Democrats on how to spend state surplus.

Michigan: Republicans introduce sales tax increase for road funding.

Mississippi: State sees rapid decrease in sales tax revenue.

Missouri: Gov. Nixon (D) proposes $600 million in new spending in state of state address.

Ohio: Ohio law sets out uniform municipal income-tax rules. School districts bill the state for lost money going to charter schools.

Pennsylvania: State Senate passes temporary bill to keep prisons open.

South Dakota: Revenue Department asks for state bank tax changes. Lawmakers support giving a portion of alcohol tax revenue to courts and jails.

Tennessee: New program finds $60 million in unreported retail taxes.

Utah: Proposed legislation would scrap movie-making tax credits in Utah. Democrat proposes barring higher education from receiving income tax revenue.

Virginia: A pending real estate tax would pay for new interstate.

West Virginia: Legislators promise to address road repairs. 


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Obama Goes in for the Kill on Coal

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Posted by James Morrone on Friday, January 22nd, 2016, 9:31 AM PERMALINK

The business of leasing public lands to mine and drill on has been happening over the course of a century in the United States.  Now that President Obama faces no more elections, he is going in for the kill of this industry vital to affordable and reliable energy production.  Department of the Interior Secretary Sally Jewel, under the instruction of President Obama, will be issuing a moratorium on federal land leases for the use of coal mining.  According to the Department of the Interior, this moratorium will stay in place for at least three years, if not longer. 

This move can have a great effect on energy prices across the nation, let alone taking another shot at the mining industry.  Even after all the attempts the administration has made to hurt and weaken the industry, coal still makes up 39% of all energy production.  The other more lauded renewable energy sources only make up a whopping 7% of the total amount of energy produced, according to the U.S. Energy Information Administration.  From the output alone, it is odd that this attack on coal would come without a viable replacement to pick up the slack in energy production.

The green movement has already set its sights on the second highest energy provider of reliable base load energy production, the natural gas sector.  Members of the green movement like Bill McKibben have said, "set the precedent that must quickly be applied to oil and gas as well."  This effort to weaken and remove 66% of the current energy production in the nation is absurd.  According to Rep. Rob Bishop (R-Utah), Chairman of the House Natural Resources Committee, Bishop explained,”

"Unfortunately, the President’s bid to solidify his legacy with the extreme left will come at the expense of America’s energy needs and will make the lives of people more expensive and more uncomfortable."

Hidden within this act, is a dark irony the administration sweeps under the rug.  Through the leasing programs, the federal government was able to secure $1.29 billion in returns.  The federal government would share the revenues collected with the states that contain the lead land.  In 2014 alone, Wyoming received more than $550 million in royalties resulting from lands leased for mining purposes.  This action will indirectly harm those not even involved in the mining industry, which is wrong and unjust. 

The next president will have the choice of whether to protect these vital energy producing industries and save the livelihoods of thousands of hardworking Americans, or continue an ideological crusade, and as such the decision in November carries even more weight. 


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Rahm Emanuel Threatens Airbnb Hosts with Jail Time

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Posted by Dennis Cakert on Thursday, January 21st, 2016, 3:38 PM PERMALINK

Chicago Mayor Rahm Emanuel has proposed a series of tyrannical regulations on local residents using peer to peer housing platforms such as Airbnb or VRBO. 

Alderman Joe Moore joined Mayor Emanuel, along with Alderman Ameya Pawar, in proposing the Shared Housing Ordinance. On Moore’s website, he claims “Under the proposal, hosts will be required to register their units with the city through a free and simple online process.”

But the regulations are far from free and simple: “No person shall engage in the business of short term residential rental intermediary without first having obtained a license,” which requires submitting contact information, proof of insurance, a written plan for complying with the regulations and “any other information that the commissioner may reasonably require in connection with issuance or renewal of the license.”

The licensee is then responsible for “all applicable federal, state and local laws and regulations regarding collection and payment of taxes, including hotel accommodation taxes” and for any criminal activity “of the guests, or of the invitees of the guests, or to acts otherwise involving circumstances having a nexus to the operation of the short term residential rental while rented to a guest.”

Chicagoans who run afoul of the crush of proposed regulations in the 17-page document face up to six months in jail:

“In addition to any other penalty provided by law, any person who violates this section or any rule promulgated thereunder shall be subject to a fine of not less than $1,500 nor more than $3,000 for each offense, or incarceration for a period not to exceed six months, or both. Each day that a violation continues shall constitute a separate and distinct offense.”

Not exactly free and simple. 

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Well, you know Rahm just gave his good friend all that money for the new hotel, he has to protect his profits now. No worries though, they will work it out so that once you make the proper contribution to the slush fund, you'll be good to go.