Texas is Governed Better than Most States, but there’s Always Room for Improvement

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Posted by Miriam Roff on Tuesday, December 16th, 2014, 1:37 PM PERMALINK

The Texas Legislative Budget Board (LBB), the Lone Star State’s equivalent of the Congressional Budget Office, released its biennial spending cap recommendation this month, calling for spending to increase by no more than 11.68 percent for the 2016-17 biennium. Although the recommendation is slightly less than a one percent increase from the current cap, it poses a threat to the economic well-being of the Lone Star State.

While the Texas constitution instructs the LBB to set spending limits based on projected economic growth, the board chooses how they evaluate growth.  Currently, the cap is based on estimated growth in personal income over the next two years and only applies to 40 percent of the budget.

The first glaring flaw with the LBB’s figure is that the premise for the spending cap is weak. As with all projections, a certain level of ambiguity is involved. Basing a budget on expected income that is not yet tangible is hazardous because it incentivizes superfluous spending. A much more appropriate metric of fiscal sustainability is limiting state spending to the rate of growth in population plus inflation.

Since the 2004-2005 budget, total spending has increased 13.4 percent beyond inflation and population growth— with a whopping $12 billion price tag. As a result, a family of four can expect to pay $1,800 more in taxes this year.

Reining in spending to mirror population growth and inflation is the fiscally responsible thing to do when it comes to protecting Texas taxpayers.

By law, the lieutenant governor, comptroller, and speaker of the house had 10 days to either accept the board’s recommendation or to enact another measure of growth. However, now that this period has lapsed, it appears that the lieutenant governor and company were nothing but a rubber stamp for this flawed cap.

Americans for Tax Reform, as member of the Texas Conservative Budget Coalition, strongly recommends state legislators enact a new and stronger cap when they return to Austin for the 2015 legislative session, capping spending for the new biennium at 6.5 percent  for the entire state budget. This cap is based on the rate of population growth plus inflation over the last biennium. Limiting the budget to this figure means that total 2016-17 appropriations would not surpass $217.1 billion.

Even though the Lone Star State is relatively well governed, Texas still has room for improvement. In addition to implementing a true budget cap that will put state spending on a sustainable trajectory, eliminating the margins tax will put the state back on track to reaching its full economic potential.

It’s not just important for Texas taxpayers that lawmakers get it right when it comes to enacting a true spending cap and pro-growth tax reform, it’s also important to the nation.

As Vance Ginn, Economist at the Texas Public Policy Foundation’s Center for Fiscal Policy has noted, “excluding the 1.1 million jobs added in Texas since the last recession started in December 2007, the rest of the U.S. employs about 350,000 fewer people than its pre-recession level.” President Obama owes Texas a big thank you.

Texas lawmakers will have a lot on their plate during the 2015 session, but enacting a fiscally responsible spending cap and getting rid of the margin tax should be at the top of the to-do list.

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Center-Right Icons: Friedrich Hayek

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Posted by Damien Salamacha on Monday, December 15th, 2014, 10:31 AM PERMALINK

The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”


Friedrich Hayek (1899-1992), the Nobel Prize laureate in 1974 for Economic Science, was an Austrian economist and philosopher best known for his defense of classical liberalism.  Born in Austria-Hungary, Hayek was greatly influential and succeeded in spreading Austrian ideas throughout the English-speaking world. 

Hayek’s The Road to Serfdom, written in 1944, serves as a persuasive and popular exposition of free-market economics.  New York Times editorial writer and champion of free-market economics Henry Hazlitt regarded his work as “one of the most important books of our generation” in a front-page review of the New York Times.   With over two-million copies sold, The Road to Serfdom has had a significant impact on conservative and libertarian politics. 

The Road to Serfdom makes a strong argument against central planned economies. In doing so, Hayek warns of the dangers of tyranny that inevitably ensue from economic planning brought out by a central government authority.  Furthermore, he argues that the abandonment of individualism and classical liberalism predictably lead to a loss of freedom, and the creation of an oppressive society. 

Moreover, in Hayek’s The Use of Knowledge in Society (1945), Hayek argues that prices serve to coordinate individual knowledge, enabling society’s members to achieve diverse, complicated ends through a principle of spontaneous self-organization.  His theory of how changing prices communicate information enabling individuals to co-ordinate their plans is widely regarded as an significant achievement in economics.

In 1974, Hayek shared the 1974 Nobel Prize in Economics with ideological rival Gunnar Myrdal “for their pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the interdependence of economic, social and institutional phenomena.”

Most notably, the views of Friedrich von Hayek and his counterpart John Maynard Keynes have served as a driving force in the United States economy since the end of World War II.  During the 1950s, 1960’s and into the 1970s, Keynes’ view of having government intervention in economic affairs has prevailed.  Since the 1970s however, Hayek’s view of government intervention in a minimal sense has gained popularity.

A series of rap parody videos recently created demonstrate this ongoing battle of economic viewpoints:


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Susan Stimpson Signs Taxpayer Protection Pledge in Bid to Defeat Virginia House Speaker

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Posted by Paul Blair on Friday, December 12th, 2014, 2:40 PM PERMALINK

Former Stafford County Supervisor Susan Stimpson has signed the Taxpayer Protection Pledge in her bid for the Republican nomination in the 28th District of Virginia. The Pledge, sponsored by Americans for Tax Reform, commits signers to oppose any and all efforts to increase taxes.

A copy of her Pledge to Virginia voters can be seen here. 

Americans for Tax Reform offers the Pledge to all candidates for state and federal office. Fourteen governors and over 1,000 state legislators have signed the Pledge. To date, Stimpson is the only candidate in the 28th district to sign the Pledge to Virginia taxpayers.

Serving as county supervisor from 2010 through 2013, Stimpson oversaw the elimination of the business, professional, and occupational licensing tax in Stafford County. She also cut property taxes, zeroed out a tax service district, eliminated impact fees and cut county staff back to 2004 levels.

“I want to congratulate Susan Stimpson for taking the Taxpayer Protection Pledge. Virginians deserve better than tax-and-spend policies that fall hard on the backs of hardworking families and small businesses. They want real solutions that create jobs, cut government spending, and incentive more economic growth,” said Grover Norquist, president of ATR.

“By signing the Pledge, Susan Stimpson had demonstrated that she understands the problems of hard-working taxpayers in Virginia.”

“Bill Howell is a serial tax hiker who refuses to take tax hikes off the table. He has teamed up with Democrats in Virginia on numerous occasions to raise taxes by billions of dollars, which is what politicians do instead of reforming government. While Republicans in North Carolina were enacting historic tax reform, Virginia was gaining prominence as the state experiencing the worst Recession recovery of any state in the region, precisely because of its dependence on the federal government and the legislature’s unwillingness to lessen the burden of government on Virginia taxpayers and small businesses.”

Susan Stimpson's record stands in stark contrast to that of her opponent, the tax-and-spender Bill Howell. Howell sponsored and oversaw the passage of House Bill 2313 during the 2013 session, in which an additional burden of $1.23 billion per year was imposed on Virginia small businesses and families. From the sales tax to property taxes, hotel taxes, a car tax hike, and a massive gas tax hike that takes effect in 2015, Howell had his hands in all of it.  

In a self-righteous opinion editorial, the Washington Post dumfoundedly proclaimed that “Virginia’s Republican House speaker stands accused of insufficient conservatism.” They said, “Ms. Stimpson is a paragon of the party’s free-lunch crowd, which insists that, perhaps through magical thinking, Virginians can somehow avoid paying for the roads, rails and bridges they use.”

This pathetic oversimplification of Stimpson’s candidacy comes as little surprise those who worked to defeat Bill Howell’s transportation tax hike in 2013. In her role as county supervisor, Stimpson was forced to budget within the means of the money provided to the county. This is something Howell simply was unable to do when he was lobbied by the Chamber of Commerce, construction industry, and big spenders in Richmond.

When Bob McDonnell stabbed taxpayers in the backs in 2013, it was Speaker Bill Howell who twisted the knife. With their votes, residents of the 28th House district may return the favor next spring. 

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Why Taxpayers Should Support the Cromnibus

Posted by ATR on Thursday, December 11th, 2014, 12:14 PM PERMALINK

Today, the U.S. House will vote on a bill to fund most of the government for the remainder of the fiscal year. This spending bill is a solid win for conservatives, as it lives within the Budget Control Act's post-sequester caps, cuts an out-of-control IRS, and guts Obamacare's bailout of Big Insurance.

The most important aspect of the bill is that overall spending lives within the Budget Control Act’s post-sequester caps. Thanks to the sequester, as a percentage of GDP, domestic discretionary spending will soon be at the lowest levels seen in living memory. The sequester is the signature success for conservatives in the past decade.

Additional items of note for taxpayers:

The bill contains a real year-over-year $345 million spending cut to the out-of-control IRS — the lowest level of funding since 2008:

2008: $10.9 (billion)

2009: $11.5

2010: $12.1

2011: $12.1

2012: $11.8

2013: $11.2

2014: $11.2

2015: $10.9

The bill also contains a host of new protections for taxpayers to be enshrined in law: ethics training, impartial application of tax law, and strict confidentiality of taxpayer information. The bill also clamps down on stupid taxpayer-funded videos and wasteful bureaucrat conferences.

No Obamacare bailouts for big insurance. Under existing Obamacare law, health insurance companies that lose money over the next three years are eligible for a taxpayer-financed bailout of their losses. This bill prevents any taxpayer funds from being used to bail out health insurance companies that participate in Obamacare

Finally, the bill contains a one year extension of the Internet Tax Freedom Act, a moratorium on Internet taxation.

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absolutely disagree.

This was a sellout of the American people, & reversal of promises to gut many things. Imagine these $astards ranted & railed aginst the very things they now fund. Wise up AFTR - you funded by the rinos?

Without any doubt left, America has only one party, only fools & stupid people think otherwise. This party, the demrino party, stands for self thievery, protection of their masters, the banksters, the oligarch families & the chamber. F the rest of you. You've been bone erd & grube erd. Have a nice day!

Paul Fries

This is a joke right? Boehner and his boot lickers gave up all the budgetary influence the Republicans gained in this recent election for an entire fiscal year. A year's worth of leverage to wield against President Obama's veto threats.

Instead we get Wallstreet goodies that the vast majority of Americans will not benefit from. We get $948 million to aid illegal immigrants establish themselves in the US. We get the continuation down the road to ruin that is the ACA. We get billions for left wing cronyism in green energy programs that cannot survive without tax payers propping them up.

The GOP's leadership betrayed the voters that just handed them the largest nationwide majority in a century. Now they're doing their best to throw that all away.


Haven't read the language so I am not clear how far they 'gutted' Dodd Frank to allow derivatives again, and whether or not they have again privatized profits for wall street but nationalized losses (we pick up the bill if their investments go bad). The savings in the article are chump change compared to what we lost in the crash of 2007.

And Obamacare is fully funded for another year. Ditto Obama's Amnesty (though they try and Gruber us by saying it's only 'extended' to January - does anyone think Obama is not going to win this?)

And insurance companies get no bail outs? What about a family that may have to shell out $20,000 in premiums and deductibles before they start getting reimbursed from their insurance companies? They cannot afford to go to the doctor or buy medicines as now they have to pay thousands of dollars in cash up front.

And if you worked 40 years for that pension? They authorized 'trustees' to reduce benefits.

Is that tax code and regulations any smaller? Are we any closer to gutting it and going with a fair or flat tax? Wouldn't that be a better way to ensure 'spending caps'? If you put in a flat tax Congress gets put on a leash - if you go with the silly spending caps and 'sequester' method that only lasts as long as your side holds court and controls Congress or the WH.

Gov. Brownback Proposes Efficiencies, Spending Restraint in New Budget Plan

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Posted by Will Upton on Tuesday, December 9th, 2014, 3:50 PM PERMALINK

Kansas Governor Sam Brownback continues efforts to reform the Kansas state government, this time with a rollback in state spending and enacting efficiencies to state programs. The general fund allotment plan would address the state’s projected $280 million overspending problem in FY 2015.

The plan would enact a four percent reduction in spending to “Cabinet Level and Other SGF [State General Fund] Funded Agencies.” The Kansas Legislature would also be asked to vote on a four percent reduction in their spending as well. In addition to enacting spending restrain regarding state general funds, Gov. Brownback has proposed using efficiencies to find savings in non-general fund accounts including the Highway Fund.

Americans for Tax Reform applauds Gov. Brownback for continuing to engage in much needed fiscal reforms in Kansas and building on historic tax cuts. Additional reforms that could be pursued to reduce the state’s overspending problem include moving to a defined contribution pension plan, pushing for the adoption of zero-based budgeting, and the adoption of reforms recommended in the Kansas Policy Institutes model budget plan.

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Kansas City District U.S. Army Corps of Engineers

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Internet Sales Tax a Drain on Small Businesses

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Posted by Matthew Bruno on Monday, December 8th, 2014, 2:06 PM PERMALINK

It is essential to small business owners throughout the country that an Internet sales tax not become law.

Senator-elect Steve Daines of Montana has detailed the ramifications of an Internet sales tax for hundreds of thousands of American small businesses. As a Representative of a no sales tax state, Congressman Daines is familiar with the economic benefits of a free market. Under MFA, online retailers would have to “contend with the constantly fluctuating sales tax codes of 45 states and 9,600 local jurisdictions.” The compliance and accounting costs make the regulatory burden of MFA a smothering force on innovation and economic growth.

With a projected increase in the average online shopper’s tax bill of $360 a year, this proposal would slow the economy and hurt struggling small businesses. Congress must remain firm in their opposition to an Internet sales tax as we head towards the commencement of the 114th Congress.

However, there remains a lame-duck threat to true Internet freedom: the expiration of the Internet tax moratorium on Wednesday the 10th at midnight. If the Internet tax moratorium is not expanded by Wednesday at midnight, state and local governments will start taxing access to the Internet. This regulation of the Internet slows innovation and hurts low income Internet users.

While MFA’s temporary defeat is a short term win for Internet freedom, the expiration of Internet access freedom remains a concern. Action must be taken by Congress in order to prevent an Internet usage tax.

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If MFA passes, it won't "level the playing field" anyway, it's a total myth. There will be a large percentage of retailers who won't be collecting the tax, among other reasons. Read part 1 & 2 for how meaningless this bill would be for "fairness". It won't change a thing, real-world.


And we collect sales tax just as you do, in the state we are located in. You wish to foist compliance and audit burdens for 46 states upon us,a burden that doesn't exist in the offline world.

Much has changed since that 2011 article - Amazon now collects sales tax for 70% of the population as they've expanded their warehouses.


What absolute nonsense to invoke small business as an excuse not to eliminate government favoritism that cripples independent retailers. You can't pretend to support free market competition while endorsing a government subsidy for Alibaba, Buy.com, etc. Small businesses -- those with less than $1 million in out-of-state sales -- are exempt from collecting the tax under the Act as passed in the Senate and, if anything, the exemption would be higher in final legislation.
We're no fan of sales taxes, but as long as they exist, we can't force brick and mortars to collect them while giving online giants a pass. More: http://www.businessweek.com/sm...

Alabama Gov. Bentley Pushing for Tax Increases

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Posted by Damien Salamacha on Monday, December 8th, 2014, 12:54 PM PERMALINK

Alabama Governor Robert Bentley, a Taxpayer Protection Pledge signer, publicly endorsed eliminating tax deductions for Alabama families as a means for solving the state’s overspending problem last Monday.

According to the Cotton State’s governor, eliminating tax deductions is not the same as raising taxes.

"I am not for raising taxes and this actually would not be raising taxes," Bentley said. "It would be taking away some deductions. That is certainly one of the things we'll be looking at."

Bentley is wrong. By signing the Taxpayer Protection Pledge, the governor has committed to “oppos[ing] changes in tax deductions or credits that increase the net tax burden on Americans.” 

Enacting legislation that burdens taxpayers with higher taxes and fees to fuel exorbitant state spending, goes against his written promise to the people of Alabama to "oppose and veto any and all efforts to increase taxes." Americans for Tax Reform encourages Gov. Bentley to pursue revenue neutral, pro-growth tax reform and enact spending restraint instead of raising taxes on Alabama families. He should look to the tax reform efforts in Kansas and Wisconsin as a model for the 2015 legislative session. 

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E-Cigarette Tax Hike Press Conference and Drinks This Sunday at Bridget Foy's in Philadelphia

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Posted by Paul Blair on Friday, December 5th, 2014, 2:57 PM PERMALINK

The Philadelphia City Council is considering a new tax on e-cigarettes and vapor products on the heels of a $2-per-pack cigarette tax hike that recently went into effect. Join Philadelphia vapers, e-cigarette users, and local small business owners for a panel discussion on the harmful impact of a new tax hike on a growing industry. 

Americans for Tax Reform and members of the vapor consumer and industry advocacy community will discuss the tax hike over drinks at Bridget Foy's in Philadelphia at 3PM on Sunday, before the Eagles game. 

Speakers will include - 

  • Amit Fridman, Owner of Sababa Vapes
  • Cynthia Cabrera, Executive Director of the Smoke Free Alternatives Trade Association
  • Paul Blair, State Affairs Manager at Americans for Tax Reform
  • Gregory Conley, President of the American Vaping Association
  • Joe Barnett, Board Member of The Vaping Militia
  • Alex Clark, Legislative Director of the Consumer Advocates for Smoke-free Alternatives Association


Moderated by Patrick Gleason, Director of State Affairs at Americans for Tax Reform. 

Free Drinks, Especially for the Press! 

RSVP to Paul Blair at pblair@atr.org. 

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Taxing so called "bad behavior" is pure socialism dressed as capitalism!! All they want is more control of your behavior. Meanwhile they fail to condemn the animistic behavior of the mobs in Ferguson because it fits their narrative. Only white people are racist. What an out and out lie!!!!

Some Rabbit

So it was never about the dangers of tobacco, it's just about raising revenue.

Speaker Boehner Holds Line against Internet Sales Tax

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Posted by Matthew Bruno on Thursday, December 4th, 2014, 5:03 PM PERMALINK

On Wednesday, Speaker Boehner stood firm against an Internet sales tax. Speaker Boehner said the Marketplace Fairness Act (MFA) will not come to the floor this Congress, preventing the Internet sales tax (IST) mandate from coming to a vote during the lame-duck session of the 113th Congress.

We expect that his statement also means that IST will not come to the House floor as part of a package either.

The Marketplace Fairness Act sought to impose one state’s sales tax on the residents of a different state during cross-border online transactions. This mandate would have unfairly subjected citizens of one state to the taxation whims of another.

Furthermore, MFA would have allowed for potential audits of businesses and individuals from other states.

Finally, MFA would have implemented unnecessary and expensive costs associated with the software required to correctly calculate the sales tax in over 10,000 different jurisdictions.

This inherently unbalanced mandate would undermined federalism while giving states the power to enforce their ideology on others.

Opponents of Internet freedom have attempted to force MFA through Congress by attaching MFA to the expiration of the Internet access tax moratorium. This agglomeration, known as the Marketplace and Internet Tax Fairness Act (MITFA), is an attempt to bundle the Internet sales tax mandate with a 10-year ban on taxing access to the Internet. This is a cheap political ploy to force through the controversial MFA while holding hostage the widely supported Permanent Internet Tax Freedom Act (PITFA). Since the Internet Tax Moratorium is set to expire on December 11th, it is vital that Internet freedom be extended.

It is crucial that Speaker Boehner was able to dispel any hopes of passing MFA in this Congress. It is now essential that Congress pass a permanent Internet Tax Moratorium in order to end this attempt to inhibit digital liberty once and for all. 

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Yay! A huge setback for big-box retail proponents who have thrown tens of millions per year in lobbying for this.


Don't worry - give it a week and Boehner will cave. That's all he knows how to do.


F*ck John Boehner!

U.S. National Debt More than Doubles under Obama’s Wasteful Watch

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Posted by Matthew Bruno on Thursday, December 4th, 2014, 9:30 AM PERMALINK

The U.S. publicly held debt has ballooned by over 50% under President Obama to now approach almost $13 trillion. With no signs of slowing, a debt this monstrous will have disastrous effects upon the growth of our country.

When Barack Obama took office on January 20, 2009, the publicly held debt stood at $6.307 trillion. Contrasting a presidency of lows, Obama grew the publicly held debt to a record high of $12.922 trillion this week. How could Obama have reached such an historic level, accomplished so much change, and harmed America’s future so dramatically in just under six years?

Federal debt held by the public currently stands at about 74% of GDP. This is the highest it has been since the end of WWII. Debt was as low as 35% of GDP as recently as 2007. The CBO projects debt as a percent of GDP will rise to 77% by 2024. This prolonged high level of debt is unhealthy for the U.S. economy.

There are two sides to the issue of government debt: spending and taxation. Debt increases when the government spends more than it takes in. Historically, federal revenues are about 18% of GDP, while federal spending is about 20.5% of GDP. Under Obama, revenue has been steady around 18%. Although taxes could always be lower, lack of revenue is not what is driving the debt problem. Rather, outlays as a percentage of GDP have begun to drift past 21% towards 22%. Furthermore, the CBO projects spending rates to increase past 30% by 2062 and past 36% by 2089. Clearly, we have a spending problem, not a revenue problem, when it comes to solving the debt situation. U.S. debt is at a record high due to Obama’s spending problem.

The Obama legacy will be defined by crippling our economy through more than doubling our nation’s debt. A failure to see the devastating effects of out of control spending and stifling taxation will hurt our country for decades to come.

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Hey Grover you support Obama's amnesty right, given your past stance on let's open the border. Do you know Grover, that illegal immigration is importing surging poverty and amnesties have proven over time to only encourage more surging poverty to come to the US to take advantage of the US welfare state? Nooo, I bet you didn't know that did you, you tool for corporate cheap labor...