Senate Should Confirm Alexander Acosta as Secretary of Labor

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Posted by Justin Sykes on Tuesday, April 25th, 2017, 3:40 PM PERMALINK

This week the Senate will vote on the confirmation of President Trump’s nominee R. Alexander Acosta as Secretary of Labor. Mr. Acosta is a dedicated public servant who has spent his career handling complex legal issues and has a record of proven management and federal agency experience. Lawmakers in the upper chamber this week should vote to confirm Mr. Acosta as the next Secretary of the Department of Labor (DOL).

During President Obama’s tenure the DOL issued a number of burdensome rules that threatened the U.S. economy and the livelihoods of millions of Americans. Since taking office President Trump has worked to reverse the DOL’s heavy-handed approach under Obama by issuing a number of Executive Orders to give relief to the business community, as well as by nominating Mr. Acosta to lead DOL.

Mr. Acosta has committed to supporting Executive Orders put forth by President Trump, primarily Trump’s order directing the DOL to review the Fiduciary Rule.

During a recent confirmation hearing before the Senate Health, Education, Labor and Pensions Committee, Acosta stated in regard to the fiduciary rule, “There is an executive action that directs how the Department of Labor will approach this rule. If I am confirmed as secretary of labor, I believe and support my following executive orders of the president.”

Acosta’s commitment to carry out Trump’s Executive actions on the Fiduciary Rule would be a welcome relief for American’s saving for retirement. As a result of the Rule, 7 million IRA holders could be disqualified from receiving investment advice, and the number of IRA’s opened annually would be reduced by up to 400,000.

Thankfully Mr. Acosta could soon be in a position to stop the rush to implementation of the Fiduciary Rule, among other onerous DOL rules put forth under Obama.

The U.S. Senate has previously confirmed Mr. Acosta on three occasions with bipartisan support – once for the National Labor Relations Board, once as an Assistant Attorney General, and also as U.S. Attorney for the Southern District of Florida.

Lawmakers in the Senate this week should vote to confirm Mr. Acosta as the next Secretary of Labor. Acosta’s credentials show he not only has the necessary experience but the ability to lead the DOL in a way that serves the Department’s mission but does so in a way that foster’s economic growth, instead of deterring growth through regulatory hurdles and bureaucratic red tape. 

 

Photo Credit: Adam Polak

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Infrastructure Bill Provides Golden Opportunity for Ohio Legislature

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Posted by Marc Dupont on Tuesday, April 25th, 2017, 2:05 PM PERMALINK

 

Today, the Ohio House’s Committee on State and Local Government will hold a hearing on HB 121, legislation that would yield significant taxpayer savings by opening up competition for water infrastructure.

HB 121, if enacted, would save the state’s taxpayers millions of dollars per year by lifting local laws that restrict which piping materials can be used for water infrastructure projects. As is the case in other states, a number of cities and counties throughout Ohio dictate what materials can be used, which results in higher costs for taxpayers across the Buckeye state.

According to the American Chemistry Council, the average cost to replace water pipes in a “closed competition” jurisdiction is $51.83 per foot. In a city like Columbus that utilizes such a system, these costs can amount to almost $300,000 per mile. Compare that with nearby Delaware County, which does not impose such restrictions and has a competitive market for pipe materials. Their capital costs are a modest $33.33 per foot, which saves taxpayers a whopping $97,680 per mile when stacked up against cities like Columbus. It is estimated that by ensuring open competition across the country through the lifting of local restrictions, the cost savings could add up to more than $317 billion nationally.  

ATR sent the following letter to Ohio lawmakers urging them to support open competition and reduced costs by voting Yes on HB 121:

             Dear Representative,

On behalf of Americans for Tax Reform and our supporters across Ohio, I urge you to support House Bill 121, legislation that would enable Ohio to rebuild its aging water infrastructure while reducing costs to taxpayers through open competition.

Arcane laws and procurement codes in many localities across the country, including Ohio, restrict the piping materials that can be used in water infrastructure projects, without consideration for project specifics. These restrictions prohibit the use of other materials that are longer lasting, better performing, and less costly to taxpayers. Such restrictions on piping materials represent classic protectionism, and another example of public policy that picks industry winners and losers.

In this case, the big losers from local closed competition statutes for water infrastructure are taxpayers, who are forced to pay the heightened costs of lower-performing piping materials whose use is mandated. Enactment of HB 121 would fix this problem by opening competition to all piping materials, which would yield significant taxpayer savings.

Take Franklin County, which has a closed competition policy on water infrastructure, compared to Delaware County. Delaware County, unlike Franklin, allows for open competition. As a result, the average per mile cost of water infrastructure piping in open competition Delaware County is $97,680 less than closed competition Franklin County. Those are real taxpayer savings.

HB 121 is a free market, pro-taxpayer reform that deserves your support. ATR will be educating your constituents and all Ohio taxpayers as to how lawmakers in Columbus vote on HB 121, and other important fiscal and economic matters throughout the legislative session. Please look to ATR to as a resource on tax, budget, and other policy matters pending before you.

Sincerely,

Grover G. Norquist

President

Americans for Tax Reform

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Jim Bowen

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IRS Data Breach Allows Hackers to Steal $30 Million from Taxpayers

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Posted by Elizabeth McKee on Tuesday, April 25th, 2017, 1:23 PM PERMALINK

IRS Commissioner Josh Koskinen testified before the Senate Finance Committee that a breach in the IRS Data Retrieval Tool (DRT) has allowed hackers to gain access to the personal information of 100,000 students, who use the tool to fill out the Free Application for Federal Student Aid (FAFSA). Identity thieves used this information to fill out fraudulent tax returns and steal an estimated $30 million from the U.S. government.

The tool works by importing students’ and families’ tax information - such as Adjusted Gross Income - directly from the IRS to their FAFSA application. The Data Retrieval Tool was popular among students, who used it to save time in applying for financial aid and student loans. It turns out that hackers were also fans of the online service; they could use fairly basic personal information to begin FAFSA applications in the guise of students. The DRT would then provide hackers with confidential tax information, which they could use to file fraudulent tax returns and steal money from American taxpayers.

Senator Orrin Hatch questioned Koskinen on why the IRS waited so long to take down the compromised Data Retrieval Tool. According to Koskinen, the IRS realized that the DRT may jeopardize taxpayer information, and therefore disabled the tool in order to address security concerns. However, most of the fraudulent tax returns in question were filed in January - months after the IRS realized the tool posed a security risk. Koskinen says he was alerted to the problem in September, but students continued to use the tool until it was taken down in March.

In 2015, as many as 17 million students had the option of using the Data Retrieval Tool to fill out their financial aid applications. This year, the IRS flagged 100,000 tax return applications that may have come from hackers who made of the DRT, although Koskinen says “that number may grow.” Of the 100,000 students whose information may have been stolen, the IRS has notified 35,000.

The exploitation of the Data Retrieval Tool is far from the only security breach that taxpayers need to worry about. Under Koskinen, the IRS has repeatedly failed to protect taxpayer information; in one breach in 2016, as many as 600,000 taxpayer accounts were jeopardized. The Government Accountability Office released a report accusing the agency of “significant deficiency” when it comes to protecting taxpayer data.

Koskinen, though, does not seem to be concerned about the IRS’s systematic failure to protect taxpayer information. “Fortunately, we were at the front end of this problem,” he testified. “We’ve been monitoring it. We have other areas we’re monitoring. We’re trying to anticipate where the criminals will attack next.”

Photo Credit: M. Seery

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Coalition Urges Congress to Rein in FDA's Overreach as Part of FY17 Spending Package

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Posted by Paul Blair on Monday, April 24th, 2017, 7:22 PM PERMALINK

Today, in a letter to GOP leadership in the House and Senate, as well as the Appropriations Chairman, Americans for Tax Reform and thirteen other free market groups urged Congress to rein in the Food and Drug Administration's May 2016 "Deeming Rule" as part of the FY17 appropriations package. Without immediate action, rules imposed by President Obama's FDA on an expanded list of "tobacco products" will force thousands of new businesses to close their doors by August of 2018. 

As a result of the Rule, which redefined tobacco products subject to regulations imposed by the Family Smoking Prevention and Tobacco Control Act (TCA), every manufacturer of tobacco-free vapor products - large and small - will have to submit what is called a Pre-Market Tobacco Application (PMTA), retroactive and burdensome pre-approval process designed to prevent new products from hitting the market. This will harm public health, stifle innovation, and kill jobs. 

Below is the letter, which can also be read here. 

We, the undersigned organizations, urge you to provide regulatory relief from the Food and Drug Administration’s May 2016 “Deeming Rule” as part of the final FY17 omnibus appropriations package. Without a modernization of a provision of the Family Smoking Prevention and Tobacco Control Act (TCA), the Deeming Rule will kill tens of thousands of jobs in an industry that is helping many American smokers transition to lower risk alternatives to combustible cigarettes.

Language and legislation sponsored by Congressmen Tom Cole (R-Okla.) and Sanford Bishop (D-Ga.) modernizes the “predicate date” for newly deemed products, providing urgent relief to small businesses from an onerous and retroactive pre-approval process imposed by last year’s Rule. House Resolution 1136 and the Cole-Bishop Amendment to the current FY17 Agriculture Bill would provide additional substantive protections for adult consumers without preventing the FDA from imposing more appropriate regulations for the product category in the future.

Congressional action is necessary to prevent the loss of tens of thousands of jobs created in the last four years. Most of these jobs are the result of domestic manufacturing and new retailers that are providing smokers with potentially effective smoking cessation and/or harm reduction choices that were not available ten years ago. 

The Deeming Rule requires new products that did not exist on or before February 15, 2007 – the predicate date – to undergo a burdensome pre-market review process that achieves little in the way of protecting public health at a very high cost. The FDA’s own estimates found that the cost of completing and submitting the required Pre-Market Tobacco Application (PMTA) would exceed $300,000 per product and take at least 500 hours of time per application. At present, the deadline for the submission of PMTAs for each product manufactured in the United States is August 8, 2018.          

There are tens of thousands of vapor products that would have to be processed by the FDA and the Center for Tobacco Products in the months following August of next year, a nightmare for the agencies and small businesses involved. That is, if businesses could even afford an attempt at compliance. Estimates from the startup industry suggest 99% of all businesses would be wiped out unless Congress moves soon to rein in the Deeming Rule’s burdensome barriers to approval for new products.

This onerous process required of every single vapor product on the market today was one that every single manufacturer of cigarettes in the U.S. avoided when the TCA was signed into law. Even if businesses could afford this investment, however, the process is designed to end in failure. Many small businesses produce hundreds of these products and would be forced to close their doors as a result of this retroactive federal rule.

In his confirmation hearing as FDA Commissioner two weeks ago, Dr. Scott Gottlieb concluded, “There should be reduced harm products available to consumers to transition them off of combustible cigarettes.” Dr. Gottlieb recognizes what numerous international health agencies and bodies have – that vapor products are substantially less harmful than cigarettes and should be embraced by the government as low-risk alternatives for smokers. Without a statutory change to TCA by Congress, however, these tens of thousands of smoking cessation products will be illegal in August of next year.

Time is of the essence for many of these businesses, which cannot afford to wait for an administrative delay in deadlines or delayed Congressional action on the 2016 Deeming Rule. The millions of consumers who currently rely on these products as less harmful alternatives to smoking need your help today.

The Cole-Bishop Amendment and House Resolution 1136 would not weaken the TCA or the ability of the FDA to impose additional product standards or regulations on new products in the future. That is precisely why the efforts are bipartisan, because there is recognition that while regulations that protect consumers are important, the Rule imposed burdens that neither protect consumers, nor acknowledge that the consequence will be the new industry’s demise.

The inclusion of the Cole-Bishop Amendment, as it passed the House Appropriations Committee, will provide significant regulatory certainty to tens of thousands of small businesses in the United States. We encourage Congress to adopt the language into the final FY17 omnibus budget. 

The letter and its signers can be read and found here. 

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ATR Joins Coalition Urging Congress to Hault DOL Fiduciary Rule

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Posted by Justin Sykes on Monday, April 24th, 2017, 2:56 PM PERMALINK

Americans for Tax Reform this week joined a coalition of free market organizations urging Congressional lawmakers to quickly act to stop the pending implementation of the Department of Labor's (DOL) Fiduciary Rule. 

The Fiduciary Rule, put forth by the DOL under President Obama, would greatly reduce the ability of financial advisors to give advice to IRA and 401(k) holders, essentially putting the federal government between Americans and their retirement savings decisions. Estimates show the Rule could disqualify up to 7 million IRA holders from investment advice, and reduce the number of IRAs opened annually by up to 400,000.

The coalition letter outlines three affirmative steps Congress should take to stop the Fiduciary Rule from taking effect before a thorough examination, as ordered by President Trump this year, is completed.

First, the Senate should confirm President Trump's nominee to lead DOL, Alexander Acosta, who can stop the rush to implementation. Second, any omnibus spending package to fund the government for the next fiscal year should include a policy rider denying funding to DOL for implementation of the Rule. Third, Congress should work toward revising the Rule or overturning it entirely. 

The full coalition letter can be found here

 

Photo credit: Shawn Clover

 

 

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ATR Urges Texas Lawmakers to Support Paycheck Protection Legislation

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Posted by Patrick Gleason on Monday, April 24th, 2017, 11:16 AM PERMALINK

Texas is widely seen as a bastion of conservative and free market policies and governance. However, while Texas is a Right to Work state, it does not have a Paycheck Protection law on the books. As a result, state agencies and municipalities across the Lone Star State relieve government worker union bosses of dues collection responsibilities and take care of that for them using taxpayer resources. 

Money the state automatically takes from worker paychecks and hands to union bosses is then used to support anti-business, anti-taxpayer policies and candidates. Today ATR president Grover Norquist sent the following letter to Texas state representatives, urging them to vote Yes on legislation already approved by the state senate that would put an end to this misuses of scarce taxpayer resources:

 

To: Members of the Texas House of Representatives

From: Americans for Tax Reform

Re: Paycheck Protection Legislation

Dear Representative,

On behalf of Americans for Tax Reform (ATR) and our supporters across Texas, I urge you to support and vote Yes on Senate Bill 13, legislation approved by the Senate, and House Bill 510, legislation introduced by Rep. Sarah Davis. This pro-worker legislation, if enacted, would end automatic government deduction of union dues from public employee paychecks.

It is a completely inappropriate use of taxpayer resources to have state agencies and municipalities serving as the money bagmen for unions, but that is the current practice in the Lone Star State, a fact whose revelation surprises many who otherwise view Texas as a bastion of pro-business policies. The question comes down to whether lawmakers think the state should be in the business of using taxpayer resources to collect political money for government unions. Lawmakers who think that is an improper function of government and use of taxpayer resources can put a stop to it by voting Yes on SB 13/HB 510.

Despite what opponents of this legislation have incorrectly alleged, SB 13/HB 510 would not affect the right to organize and join a union; the legislation would simply require union bosses to collect their dues from workers voluntarily, as opposed to the current practice of having state agencies and municipalities collect it for them. If unions are providing a valuable service to workers, then they will have no problem convincing workers that they should join and pay dues voluntarily without automatic state confiscation. However, research indicates that without proper safeguards, many workers are forced to give up hard earned wages against their will.

A study by the Heritage Foundation found states that passed paycheck protection laws like SB 13 & HB 510 saw union spending on political campaigns and activities fall by an average by 50% after such laws were enacted. In Washington State, the Washington Education Association saw the number of members donating to the political activity fund drop from 82% to 11% following the implementation of Washington’s paycheck protection law in 1992. This underscores the fact that often the goals of the union leadership do not reflect the priorities of workers.

One of the more egregious aspects of automatic confiscation of union dues from government worker paychecks in Texas is fact that money the state collects for union bosses is in turn funneled to candidates and lobbyists who advance and advocate anti-business, anti-taxpayer policies. Enactment of SB 13 or HB 510 would put an end to this racket. As such, ATR urges you to vote Yes on SB 13 and HB 510. ATR will be educating your constituents and all Texas taxpayers as to how lawmakers in Austin vote on this and other important fiscal and economic matters throughout the legislative session.   

 

Sincerely,

Grover G. Norquist

President

Americans for Tax Reform

Photo Credit: 
Stuart Seeger

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ATR Supports H.J. Res. 73 and S.J. Res. 19 Repealing CFPB’s Prepaid Card Rules

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Posted by Daniel Uzi Frydman on Monday, April 24th, 2017, 9:50 AM PERMALINK

Americans for Tax Reform (ATR) President Grover Norquist this week sent a letter to Congressional lawmakers urging support for Representative Roger Williams' H.J. Res. 73 and Senator David Perdue's S.J. Res. 19.

Both resolutions would use the Congressional Review Act to block the Consumer Financial Protection Bureau’s (CFPB) rules on prepaid debit cards, put forth at the end of 2016 and set to go into effect April of 2018. The CFPB’s prepaid card rule would deprive American financial consumers of access to banking services and perpetuate the regressive impacts of Dodd-Frank.

Below is the text of the letter to Congress, which can also be found here.

April 24, 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 Consumer Financial Protection Bureau’s (CFPB) rule on prepaid debit cards.

Issued in the fall of 2016 and set to go into effect April of 2018, the CFPB’s rule on prepaid debit cards would actually harm the same financial consumers the Bureau sought to protect in issuing the rule. Millions of American consumers use and rely on prepaid cards, yet if the CFPB’s rule is allowed to proceed those millions of consumers will be deprived of access to needed banking services.

As a result of the Dodd-Frank Act, many banks no longer offer free checking accounts or have alternatively either increased fees or required higher minimum balances for maintaining free checking accounts. This has had the effect of pushing many financial consumers out of the traditional banking system and led to millions of Americans becoming “unbanked.” The CFPB’s rule would only increase this regressive trend, impacting primarily low-income consumers.

A report from the Pew Charitable Trusts found that of an estimated 23 million consumers using prepaid cards, a quarter of those were low-income Americans, with a third having annual income below $15,000. Prepaid cards have increased in popularity in recent years, with the amount placed on prepaid cards growing from $1 billion in 2003 to a projected $112 billion for 2018.

This is due in part to the fact that for consumers that can no longer afford traditional banking services, prepaid cards are a more affordable option than traditional debit cards linked to checking accounts. The CFPB’s rule will in turn have a disparate impact on low-income financial consumers and as a result further increase the number of unbanked Americans.   

Thankfully, Representative Roger Williams and Senator David Perdue have introduced joint resolutions of disapproval of the CFPB’s rule under the Congressional Review Act. H.J. Res. 73 in the House and S.J. Res. 19 in the Senate would repeal the CFPB’s costly and regressive prepaid debit card rule.

I urge you and your colleagues in Congress to support both H.J. Res. 73 and S.J. Res. 19 and use the authority granted under the Congressional Review Act to protect American consumers and preserve choice in financial products by repealing the CFPB’s rule on prepaid debit cards.

Sincerely,

Grover G. Norquist
President
Americans for Tax Reform​

Photo Credit: Phil Roeder


CFPB Prepaid Card Rules Will Harm Consumers and Should be Repealed

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Posted by Justin Sykes on Friday, April 21st, 2017, 2:38 PM PERMALINK

In the fall of 2016 the Consumer Financial Protection Bureau (CFPB) issued final rules on prepaid debit cards, now set to go into effect April 1st of 2018. As is the case with most CFPB rule makings, the rule on prepaid debit cards will actually harm the same consumers it was originally designed to “protect.” Over 23 million Americans use and rely on prepaid cards, yet if the CFPB’s rule goes into effect, those same consumers will be pushed out of the market, depriving them of access to basic banking services.   

Since enactment of the Dodd-Frank Act, and resulting myriad of regulations, many banks have found it no longer advantageous or feasible to offer free checking accounts, and have alternatively increased fees and required higher minimum balances in order to maintain free checking accounts. This in turn pushed many financial consumers, which tend to be low-income, out of the traditional banking system.

Many of the consumers that lost their free checking accounts or were no longer able to afford them turned to alterative financial products, such as prepaid debit cards, which serve a similar function as traditional bank accounts. Prepaid cardholders can have their paychecks directly deposited onto the cards in much the same manner as standard debit card and checking account arrangements.

In recent years prepaid cards have grown in popularity because they are often cheaper than traditional account linked debit cards, which is why they are often preferred by low-income users. In fact, the amounts placed on prepaid cards have grown from $1 billion in 2003 to a projected $112 billion for 2018.

According to a 2014 report from The Pew Charitable Trusts, of an estimated 23 million consumers using prepaid cards, a quarter of those were low-income Americans, with a third having annual income below $15,000. Obviously these numbers reflect that if the CFPB prepaid card rule moves forward, low-income Americans will bear the brunt of the impact. This will likely increase the amount of “unbanked” Americans, which already number in the millions.

Additionally, as pointed out in a recent piece from the American Action Forum (AAF), according to the CFPB’s own estimates the prepaid rules will result in 137,642 one-time burden hours for prepaid card companies forced to comply, and another 19,494 ongoing burden hours.

AAF estimates that the rules will costs prepaid card companies $5,257,935 just to get into compliance with the rule, in addition to another $744,697 annually just to maintain compliance. Such costs will inevitably be passed onto consumers, depriving even more of needed banking services.

Thankfully, this year the House and Senate introduced joint resolutions of disapproval of the CFPB’s prepaid card rule pursuant to the Congressional Review Act. H.J. Res. 73 was introduced in the House by Representative Roger Williams (R-Texas) and S.J. Res. 19 was similarly introduced in the Senate by Senator David Perdue (R-Ga.). 

Lawmakers on Capitol Hill should support these common sense measures that will protect American consumers, especially those of limited means, that rely on and prefer prepaid debit cards. This will not only increase choice for consumers but will ensure that those who have been pushed away from traditional banking products and services will have access to alternative financial services such as prepaid cards.  

 

Photo credit: Paul Istoan

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ATR Statement Supporting Chairman Hensarling's Financial CHOICE Act

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Posted by Justin Sykes on Thursday, April 20th, 2017, 11:04 AM PERMALINK

ATR President Grover Norquist issued the following statement today in support of House Financial Services Committee Chairman Jeb Hensarling’s release of the Financial CHOICE Act:

“Americans for Tax Reform supports Chairman Hensarling’s efforts to reform the costly and burdensome Dodd-Frank Act with his release of the Financial CHOICE Act this week. Chairman Hensarling has consistently been a champion for financial consumers and reforming Dodd-Frank. The Financial CHOICE Act looks to deliver reforms that will replace the misguided regulatory burdens imposed on America’s financial consumers and small financial institutions by the Obama Administration. 

“Under President Obama Americans saw the role of government in the market increase exponentially with the Dodd-Frank Act. While Dodd-Frank was supposed to target Wall Street, impacts of the law have instead fallen heaviest on Main Street, reducing small business lending, shuttering credit unions and community banks, and growing the number of unbanked Americans.

“Chairman Hensarling’s Financial CHOICE Act will increase accountability from financial regulators and protect American consumers while also fostering economic growth. The Financial CHOICE Act seeks to rein in ‘regulatory taxes’ imposed by Dodd-Frank that have served only to burden consumers with increased fees and reduced products and services. 

“The Financial CHOICE Act also gives much needed relief to America’s credit unions and community banks, which have been crushed by compliance costs in recent years, with an average of one institution being shuttered daily. The Act also repeals the failed Durbin Amendment and the Department of Labor’s Fiduciary Rule, both of which will benefit financial consumers. 

“I look forward to working with Chairman Hensarling on this pro-consumer, pro-growth legislation, that ensures American consumers and taxpayers are protected, while also fostering a regulatory climate that allows business to grow and prosper.” 

 

Photo credit: Gage Skidmore 


ATR Urges Support for Nebraska Tax Reform Measures

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Posted by Marc Dupont on Tuesday, April 18th, 2017, 5:25 PM PERMALINK

 

Nebraska has the opportunity to become the next state to carry the torch of tax reform as the state’s legislature gears up to debate a bill this Friday that, if enacted, would provide needed relief to taxpayers and improvements to Nebraska’s tax code.

LB 461, which recently passed out of committee, would lower the top personal and corporate income tax rates from 6.84% and 7.81%, respectively, to as low as 5.99% by 2029, so long as certain revenue triggers are met.

Across the country, recent years have proven to be a golden age for pro-growth tax reform. States like Texas, Tennessee, Arizona, Arkansas, Wisconsin, and especially North Carolina have all enacted policies that have resulted in lower taxes, allowing residents to keep more of their hard-earned income. States that fail to improve their codes and provide relief to taxpayers are being left behind in the competition for investment, employers, jobs, and people. By enacting LB 461, Nebraska legislators can ensure the Cornhusker State will not be left behind.

According to ALEC’s 2016 economic outlook index, Nebraska is dismally ranked 32nd in the nation. In fact, all of its neighboring states, from Wyoming (4) to Iowa (29), are ranked as more economically competitive. Passage of LB 461 will help Nebraska close this competitiveness gap. Today, Americans for Tax Reform sent the following letter Nebraska lawmakers calling on them to enact rate reducing tax reform by voting Yes on LB 461:

            Dear Members of the Nebraska Legislature,

On behalf of Americans for Tax Reform (ATR) and our supporters across Nebraska, I urge you to support LB 461. Nebraska currently has a top personal income tax rate of 6.84% and 7.81%. LB 461, if enacted, would reduce those rates by 12.4% and 23.3%, respectively, taking both rates down to as low as 5.99 percent by 2028, so long as revenue triggers are met.

There is ample evidence that lower tax rates make states more competitive, and more conducive 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 taxation 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.”

As the Platte Institute has reported, Nebraskans face a higher burden than taxpayers in competing states:

“On average, taxpayers in Nebraska pay 52 percent more personal income tax per person, and 36 percent more corporate income tax. That’s $1,125 per person per year in Nebraska versus $541 in the five rival states [Texas, Florida, Arizona, Colorado, and Iowa] for personal income taxes.”

If that weren’t bad enough, your constituents have been hit with 20 federal Obamacare tax increases over the last eight years. As such, individuals, families, and employers across Nebraska are greatly in need of the sort of income tax relief that enactment of LB 461 would provide.

A reduction in the personal income tax would allow taxpayers to keep more of their hard-earned income, while increasing the job-creating capacity of small businesses that file under the individual income tax system. Meanwhile, a corporate rate reduction would make Nebraska more attractive to employers, job creation, and investment. Corporate tax relief will benefit the broader populace, as the burden of corporate taxation is borne by people in the form of lower wagers, fewer job opportunities, and reduced returns on savings and investment. Enactment of the type of rate-reducing tax reform found in LB 461 would help Nebraska compete with the likes of Texas, Oklahoma, Colorado, North Carolina, Florida, Arizona and other competitor states that already boast lower tax burdens and more hospitable business tax climates than Nebraska.

North Carolina provides a great example of how much progress can be made in a short period of time, and should inspire those seeking to provide relief to Nebraska taxpayers while improving the state tax code. Just four years ago, North Carolina had the highest personal and corporate income tax rates in the Southeast. Thanks to tax reform measures enacted in 2013 and 2015, North Carolina now has a flat personal income tax rate that is the lowest in its region, with the exception of Florida and Tennessee, which do not levy an income tax. North Carolina’s present corporate tax rate, at 3%, is now less than half of what it was just four years ago, and the personal income tax rate has been reduced by nearly 30%.

In addition to having the lowest personal income tax rate in the region, North Carolina now has the lowest corporate rate in the nation among states that levy such a tax. Going into 2013, North Carolina had the 44th ranked business tax climate in the country on the non-partisan Tax Foundation's business tax climate index. Thanks to the reforms enacted since 2013, North Carolina now has the nation’s 11th best business tax climate. This remarkable improvement in North Carolina’s tax code was achieved with the same sort of revenue triggers that LB 461 uses to provide tax relief for Nebraskans in a fiscally responsible fashion.

Americans for Tax Reform urges you to vote YES on LB 461. ATR will be educating your constituents and all Nebraskan taxpayers as to how lawmakers in Lincoln vote on LB 461 and other important fiscal and economic matters throughout the legislative session. Please look to ATR to as a resource on tax, budget, and other policy matters pending before you. If you have any questions, please contact Patrick Gleason, ATR’s director of state affairs, at (202) 785-0266 or pgleason@atr.org

          Sincerely,

            Grover G. Norquist

            President

            Americans for Tax Reform

Photo Credit: 
Ali Eminov

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