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Arizona Republicans Committed to Preventing Unintended Tax Increase

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Posted by ATR on Friday, May 24th, 2019, 3:56 PM PERMALINK

Arizona Republicans are taking advantage of a unique opportunity to make their state a more attractive place to live and invest and, more importantly, protecting taxpayers across the Grand Canyon State from an income tax hike. 

As an unintended consequence of the federal Tax Cuts and Jobs Act (TCJA) – which significantly reduced individual and corporate income taxes and resulted in 90 percent of wage earners having higher take-home pay and the lowest unemployment in 50 years – Arizonans will be left facing a tax hike at the state level if no actions are taken to prevent it.

Due to the way Arizona’s tax code conforms to the federal tax code, simply conforming to the new federal code would result in a net income tax increase unless lawmakers include provisions to offset it. Fortunately for taxpayers, Republicans in both chambers have remained committed to following the lead of lawmakers in other states, such as Iowa, Georgia, and Michigan, and finding a way to return the conformity revenue back to the taxpayers.

Grover Norquist, president and founder of Americans for Tax Reform, sent lawmakers a letter in support of this efforts. The full text of the letter is pasted below:

May 24, 2019

To: Members of the Arizona Senate

From: Americans for Tax Reform

 

Re: Protect Arizona Taxpayers

Dear Senator,

On behalf of Americans for Tax Reform (ATR) and our supporters across Arizona, I urge you to keep taxpayers in mind as the 2019 legislative session comes to close. Legislation that would result in a net tax increase will be scored as a violation of the Taxpayer Protection Pledge.

As an unintended consequence of the federal Tax Cuts and Jobs Act (TCJA) – which significantly reduced individual and corporate income taxes and has resulted in 90 percent of wage earners having higher take-home pay and unemployment hitting a 50-year low – Arizonans will be left facing a tax increase at the state level if no actions are taken to prevent it.

Due to the way Arizona’s tax code conforms to the federal tax code, simply conforming the state code to the new federal code would result in a net tax increase unless rate reductions or other provisions are included to offset it. Fortunately, legislators in both chambers have remained committed to doing just that by following the lead of lawmakers in other states, such as Iowa and Georgia, and returning this portion of their constituents’ federal tax cut back to them in the form of pro-growth tax reform.

One proposal would both hold taxpayers harmless and make Arizona’s tax code more competitive by collapsing Arizona’s five individual income tax brackets into three, taking the rates from 2.59, 2.88, 3.36, 4.24, and 4.54 down to 2.85, 3.35, and 4.38. Importantly, this proposal would also increase the standard deduction from $5,300 to $12,000 for individual filers and $10,600 to $24,000 for those filing jointly.

The larger standard deduction would expand the zero bracket and ensure that most low-income earners still receive a tax cut.

In addition to preventing an income tax hike, this proposal would make Arizona more conducive to economic growth. A lesser-circulated fact is that many small businesses file under the individual tax code. As such, a lower top individual income tax rate would allow business owners to keep their resources invested in jobs, wages, and businesses operations rather than bloated government spending programs. 

This three-bracket proposal or similar proposals to offset the tax increase that would result from conforming to the federal tax code would be a step in the right direction for Arizona taxpayers and should be supported, so long as all of the tax changes in the bill score as revenue neutral on net at most.

ATR applauds your commitment to using pro-growth tax reform as a way to return the excess revenue that will be collected from conforming Arizona’s tax code to the federal tax code back to taxpayers. Legislation that would result in a net tax increase should be rejected on principle and will be scored as a violation of the Taxpayer Protection Pledge.

 

Sincerely,

Grover Norquist
President
Americans for Tax Reform

Photo Credit: Gage Skidmore/Flickr


Warren Doubles Down on Gun Tax

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Posted by ATR on Wednesday, October 2nd, 2019, 4:54 PM PERMALINK

Norquist: “Warren is proposing to dramatically hike the tax on gun ownership and your ability to protect yourself. It is a very high ‘poll tax’ -- a tax so high that it actually cripples the rights of lower income Americans to defend themselves.”

Today at an MSNBC town hall in Nevada, Elizabeth Warren affirmed her plan to impose a steep national gun tax on the American people if elected.

In August, Warren said a goal of her gun tax plan is “to reduce new gun and ammunition sales” through the imposition of a 30 percent federal gun tax and a 50 percent federal ammunition tax.

Under her plan, an American seeking a $400 shotgun to protect their household would face a tax burden of $120, for a total cost of $520.

As noted in a Washington Times op-ed by Americans for Tax Reform’s Emmanuel Sessegnon, the Warren gun tax will disarm the poor:

Who would be unable to buy guns because of the Warren gun tax? Certainly not the oft-mentioned “millionaires and billionaires” she claims to want to stick it to. Many poor households will be unable to afford a gun to protect their home.  

It’s obvious which group Sen. Warren is targeting. Her tax targets those among us who are already the most vulnerable. Many people under the poverty line live in dangerous neighborhoods. While rich liberals like Ms. Warren can afford private security guards, the rest of us need to be able to defend ourselves. 

MSNBC host Craig Melvin today asked Warren: “You’ve also talked about raising taxes on the purchase of guns. Raising taxes on ammunition as well. What’s the thinking there, where would the revenue go. Is part of the thinking perhaps, making guns more expensive might keep guns out of the hands of some people as well?”

Warren acknowledged her gun tax and said it was aimed at “areas that we know historically there’s been gun violence.”

As ATR’s Sessegnon points out in his op-ed, the leading gun tax proponent in congress also has a goal to disarm Americans through taxation:

Meanwhile in Congress, Democrat Danny Davis is sponsoring gun tax legislation. His confiscatory intentions are the same as Ms. Warren’s as shown by a statement he made last year: 

So if rich people can only get firearms then only rich people would be able to pay the price and if that could prevent some people from getting them, I’d want to prevent all people from getting them,” he told The Daily Caller. “But if rich people were willing and would continue to pay the high price, then I’d be happy that we kept the other group from getting them.

Americans for Tax Reform president Grover Norquist said, “Warren is proposing to dramatically hike the tax on gun ownership and your ability to protect yourself. It is a very high ‘poll tax’ -- a tax so high that it actually cripples the rights of lower income Americans to defend themselves.”

See more:

Biden: “I’m Gonna Double the Capital Gains Rate to 40%”

Tax Hike Bernie Says He’ll Tax All Income Over $29K 

Video: Warren Dodges Middle Class Tax Question Again

Biden Calls for Full Repeal of Trump Tax Cuts

Biden Attacks Warren: "She's Going to Raise People's Taxes”

Video: Media Fed Up with Elizabeth Warren Tax Dodge

Biden: End "Trump's Tax Cut for The Top Tenth of One Percent"

Booker: “My plan would reverse those toxic Trump tax cuts”

Stephen Colbert Calls Out Warren for Dodging Middle Class Tax Question

Video: Warren Dodges MSNBC’s Middle Class Tax Questions

Elizabeth Warren is Still Dodging the Middle Class Tax Question

Video: 2020 Democrats Promise Higher Taxes

Biden Caught Lying about GOP Tax Cuts

Bill De Blasio: “As President, I Would Issue a Robot Tax”

Biden Endorses Carbon Tax

Kamala Harris Calls for Ban on Plastic Straws

Elizabeth Warren's Climate Plan Calls For "Reversing" GOP Tax Cuts

Sanders: We’re Going to “Absolutely” Raise the Corporate Tax Rate

Elizabeth Warren on Corporate Tax Cuts: “I really want to see them rolled back.”

Bill de Blasio Calls for Corporate Tax Rate Hike

Amy Klobuchar: Raise the Corporate Tax Rate to 25%

Biden on capital gains tax: “We should raise the tax back to 39.6 percent”

Kamala Harris Threatens to Repeal GOP Tax Cuts 3 Times in August

Joe Biden: “I’m going to eliminate most all” of GOP Tax Cuts

Cory Booker Calls for Repeal of "Toxic" GOP Tax Cuts

Marianne Williamson Joins Dems Calling for TCJA Repeal

Kamala Admits Her Plan Would End Employer Insurance

“Medicare for All” is a Middle Class Tax Increase, Say Dems

Elizabeth Warren Can’t Dodge the Middle Class Tax Question Forever

Dem Socialized Healthcare Plan Will Lead to Middle Class Tax Hikes

Elizabeth Warren "Wealth Tax" was described by the WaPo editorial board as having "a certain authoritarian odor"

Supposed “Moderate” Democrat John Delaney Wants to Impose Carbon Tax on the American People

Klobuchar Suggests Capital Gains Tax Hike and “Doing Something” About TCJA

VIDEO: 2020 Democrats Will Raise Your Taxes

Kamala Harris Campaign Headquarters Located in Opportunity Zone Created by GOP Tax Cuts

Julian Castro: “We’re going to have to raise taxes.”

Biden and Harris: Raise the Corporate Tax Rate

Biden tweet: Ignore the fact I’ve already called for middle class tax hikes

Kamala Harris: “I Will Reverse” Trump’s Tax Cuts

Kamala Harris Calls for Repeal of Tax Cuts Four Times in Three Minutes

Julian Castro Caught Lying about GOP Tax Cuts

NYT: Bidencare Will be Funded by “rolling back” GOP tax cuts

Kamala Harris: I Will Repeal “That Tax Bill”

Cory Booker: “I do support” Imposing Carbon Tax on Americans

Harris: “We are Going to Repeal That Tax Bill”

Biden: I Will Raise Corporate Tax Rate to 28%

Kamala Harris Continues to Lie about Tax Cuts

Jay Inslee: “Repeal the Trump Tax Cuts”

Biden Running Ads to “Repeal Trump’s Tax Cuts.”

VIDEO: Ten Times Biden Threatened to Repeal Tax Cuts

Here’s what happens if Dems repeal tax cuts

VIDEO: 10 Times 2020 Democrats Have Threatened to Repeal TCJA

Kamala Harris: When I Enter Office "I Will Repeal" the TCJA

Biden: “First thing I would do as President is Eliminate the President’s Tax Cut.”

Bernie Sanders claims people would be “delighted to pay more in taxes”

Biden: Tax Cuts Will be “Gone” If I’m Elected

Kamala Harris: I Will Repeal Tax Cuts “on day one”

Biden again says capital gains tax is “Much too Low”

Biden: Capital gains tax “much too low”

VIDEO: Five Times Biden has Threatened to Repeal Tax Cuts

Biden: “First thing I’d do is repeal those Trump tax cuts.”

Joe Biden broke his middle class tax pledge

“Mayor Pete” Calls for Steep Tax Hike on Homes and Businesses

Kamala Harris Vows Repeal of Tax Cuts “on Day One”

Biden: “When I’m President, if God willing I am, we’re going to reverse those Trump tax cuts.”

Photo Credit: Gage Skidmore/Flickr


Tax Foundation Statements in Support of Indexing Capital Gains

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Posted by ATR on Wednesday, September 4th, 2019, 1:33 PM PERMALINK

“Capital gains should be indexed to inflation.” – Tax Foundation -- July 29, 2018

“When that inflation is ignored in the taxation process, the investor gets taxed on gains that they didn’t make.” -- Tax Foundation -- July 23, 2018

“Let's get real. Inflation-related gains on the sale of assets are not a real increase in wealth. It's time to index the purchase price of assets for inflation to provide savers some relief from this tax on fictitious income.” – Tax Foundation – March 6, 2018

“It is time to ‘get real’ with capital gains taxes. The purchase price of assets later sold for capital gains or losses continues to *not* be adjusted for inflation.” – Tax Foundation – July 16, 2018

“Under the current tax system, capital gains are not adjusted for inflation, meaning individuals pay tax on income plus any capital gain that results from price-level increases. Inflationary gains do not represent a real increase in wealth, thus taxes on inflationary gains are taxes on ‘fictitious’ income, which increases the effective tax rate on saving and investment.” – Tax Foundation – April 16, 2019

“In other cases, inflation can account for 100 percent of the capital gains tax owed; further, inflation can cause a nominal gain to be realized despite suffering a capital loss in real terms. Ultimately, the lower rate on capital gains does not mitigate the inflation issue, as taxpayers still face tax liability whether they made a real gain or real loss.” – Tax Foundation – April 16, 2019

“Inflation-related gains on the sale of assets are not a real increase in wealth. Indexing the purchase price (tax basis) for inflation would provide savers some relief for this type of tax on fictitious income.” – Tax Foundation – March 6, 2018

“Failure to index the purchase price (tax basis) of assets increases the effective tax rate on saving and investment. Less capital is formed, depressing wages and employment.” – Tax Foundation – March 6, 2018

“Inflation is low today, but that may not always be the case. Indexing provides important protection for all citizens, even those who have no capital gains, by reducing government’s ability and incentive to raise effective tax rates by inflating the currency.” -- Tax Foundation – March 6, 2018

“It is time to ‘get real’ with capital gains taxes. Many elements of the income tax are adjusted for inflation, such as tax brackets, standard deductions, and income thresholds or dollar amounts of some tax credits. However, the purchase price of assets later sold for capital gains or losses is not adjusted for inflation. As a result, inflation can do a real number on savers by turning real losses into taxable nominal gains. To avoid such outcomes, it would make sense for the government to allow an inflation adjustment for the cost of assets held outside of tax-preferred saving arrangements. (In pensions, retirement plans, and education savings plans, the problem is handled by other means, either by tax deferral or by exclusion of tax on gains.)” – Tax Foundation – March 6, 2018

“Some might argue that capital gains receive preferred tax treatment under current law, because the gain is deferred until realized, and it receives a lower tax rate than ordinary income. The lower rate is the ‘capital gains differential,’ which is sometimes rationalized as compensating savers for inflation. However, the capital gain differential does not properly adjust for the excess real tax burden due to inflation. If the nominal gain is really a loss, then even a reduced tax rate is too high. If the gain is in part a real gain, but a small one, then the reduced rate is helpful, but still inadequate. – Tax Foundation – March 6, 2018

“In some instances, the practice of taxing the nominal gain can lead to an infinite effective rate on real capital gains when the increase in price is only due to inflation.” – Tax Foundation – December 17, 2013

“When stocks are bought at particular high points in the market, inflation can account for 100 percent of the capital gains tax owed. In fact, the inflationary increase in price can cause a nominal capital gain for a taxpayer despite suffering a capital loss in real terms.” – Tax Foundation – December 17, 2013

“Taxpayers can end up paying a very high tax rate on capital gains and can even pay taxes on capital gains when the real value of their investment has actually declined. In fact, research from the 1980s showed that taxpayers paid an additional $500 million in extra tax due to inflation in just 1973. Taxes on capital damage economic growth, and failing to account for inflation exacerbates the damage.” -- Tax Foundation – December 17, 2013

“While repealing this tax would be the preferable option, inflation indexing would be an improvement that would link the tax to real increases in income rather than increases in inflation.” -- Tax Foundation – December 17, 2013

“Capital Gains Taxes Should Be Indexed to Inflation” – Tax Foundation – July 24, 2018

 

 

Photo Credit: SalFalko


Elizabeth Warren's "Federal Office of Broadband Access" Will Fail and Send Billions of Taxpayer Dollars Into a Black Hole

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Posted by ATR on Thursday, August 8th, 2019, 5:14 PM PERMALINK

This week Elizabeth Warren called for a taxpayer funded "federal Office of Broadband Access" with "publicly-owned and operated networks."

Warren tweeted:

"Let’s create a federal Office of Broadband Access, and invest $85 billion into making sure every home in America has a broadband connection. That means publicly-owned and operated networks—no giant telecom companies running away with taxpayer dollars."

Are government-run broadband networks an appropriate use of taxpayer resources? No.

As shown in Americans for Tax Reform's newly-released infographic, government-owned broadband networks have an abysmal track record.

Proponents of big government typically sell Government Owned Networks (GONs) as providing competition and additional choices. In reality, however, this nice-sounding idea never works as planned.

In addition to the initial construction cost of building out a basic fiber network, frequent and expensive technology upgrades are necessary in order to remain current in such an innovative field. Government entities rarely consider this fact, however, and thus grossly underestimate the true costs of a GON.

Government entities also overestimate the demand for a GON. Despite having access to a government-owned and operated network, most consumers choose to remain with their trusted private sector provider. Overestimated demand and underestimated costs is a recipe for a financial gap that taxpayers will always be forced to fill. 

In addition to the financial risks at stake, GONs also jeopardize access to new technologies. Unlike government, private sector providers cannot charge below the cost of service because it would drive them out of business. As if control of the permitting process and possession of regulatory authority were not enough of an advantage, government entities would also able to charge consumers below the cost of service since they can subsidize costs with tax dollars.

This manufactured “competition” with government would discourage private providers from expanding and investing in areas where GONs are present, as their odds of success would be hindered by competing with an entity that does not need to turn a profit. Since it is vigorous competition between private providers that spurs innovation, improves quality of service, and drives consumer prices down, GONs would lead to fewer choices for consumers, outmoded technology, and deteriorating service.

For example, Tennessee alone has had several GONs that have either failed outright or are currently being propped up. These cautionary tales (and the GON failure in nearby Bristol, Virginia) can be found on the infographic linked here and on the list below:

Fayetteville, Tennessee:

Fayetteville Public Utilities rolled out its broadband network in 2000, spending more than $11 million. While it is technically cash flow “positive,” Fayetteville’s GON would take more than 60 years – as much as double the useful life of the network – to make money.

Memphis, Tennessee: 

In 2001, the Memphis Light, Gas, and Water Division’s GON, Memphis Networx, was made available to the public. Fewer than 5 years later, it was clear that this undertaking was a big financial mistake, and by 2007, the GON was sold off to a private company at a $20.5 million loss on its $32 million investment.

Bristol, Virginia:

The Bristol Virginia Utility Authority began is GON, OptiNet, in 2002. Despite being improperly subsidized by BVU’s electric revenues, it still failed to turn a profit and was eventually sold at a loss of more than $80 million. A federal criminal investigation was launched into OptiNet, revealing that along with the improper subsidies, BVU officials also illegally saved the network hundreds of thousands by undercharging it for pole attachments, and also falsified invoices and took kickbacks.

Pulaski, Tennessee:

In 2005, Pulaski Electric System poured around $8.5 million into building out its GON, PES Energize. Despite being a cash flow positive project, its rate of return is so poor that it would take somewhere between 450 and 500 years to break even.

Morristown, Tennessee:

In 2006, Morristown Utility Systems rolled out its GON, MUS Fibernet, for more than $25 million. Over the years, interest in this GON has been so low that it cannot cover basic operational costs, and will never break even.

Tullahoma, Tennessee: 

The Tullahoma Utilities Authority started its municipal broadband network, lightTUBe, in 2007 for around $17 million. Since there were already numerous private providers serving this small town, it is unsurprising to learn that lightTUBe has not attracted many subscribers. LightTUBe’s rate of return is so low that it would take more than 100 years to pay off its debts.

Clarksville, Tennessee:

In 2007, the Clarksville Department of Electricity rolled out its fiber network, which was originally projected to cost $40,200,000. Between construction cost overruns and basic operation expenses that it could not afford to cover, CDE was forced to borrow an additional $20 million. Clarksville’s GON has lost so much money over the years that it will never be able to stand on its own.

Chattanooga, Tennessee:

In 2008, Chattanooga’s Electric Power Board began its fiber-to-the-home service. Including a $50 million loan from the EBP’s electric power division that was used to finance initial planning, $162 million in local revenue bonds that were used to finance the construction, and a one-time $111.5 million subsidy from the federal government, it would take more than 680 years – well beyond its useful life – for this GON to break even.

Photo Credit: Gage Skidmore


Oklahoma Lawmakers Should Reject Protectionist Bill That Would Drive Up Health Care Costs

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Posted by ATR on Tuesday, May 14th, 2019, 4:37 PM PERMALINK

The Oklahoma Senate will be discussing a protectionist bill that would further curtail free market forces in health care. Despite its title, the Patient's Right to Pharmacy Choice Act, House Bill 2632 is actually intended to benefit independent pharmacists at the expense of Oklahoma patients and taxpayers.

In a letter, Grover Norquist, president and founder of Americans for Tax Reform, warned Oklahoma lawmakers of the serious negative consequences that would stem from HB 2632. The letter is pasted below:

 

May 13, 2019 

 

To: Members of the Oklahoma Senate

From: Americans for Tax Reform 

 

RE: Oppose House Bill 2632 

 

Dear Senator, 

 

On behalf of Americans for Tax Reform (ATR) and our supporters across Oklahoma, I urge you to oppose House Bill 2632, protectionist legislation that would increase regulations in healthcare and further curtail free market forces, along with the right of contract in a sector already suffering from overbearing government interference. 

Pharmacy Benefit Managers (PBMs) are private firms that negotiate the amount pharmacies get reimbursed for prescriptions. PBMs are under attack right now as our entire drug pricing system sustains fire. Though PBMs serve an important role in the free market, it is reasonable to scrutinize some of their practices (and the overall system as it currently stands) and some reform may be worth considering. 

However, HB 2632 fails to productively reform PBMs or provide for any useful advantages to drug pricing. Instead, it is a protectionist bill that would increase government meddling in health care markets in order to benefit small “community” pharmacists at the expense of patients, taxpayers, and the insurance system. 

For example, if implemented, HB 2632 would allow for government to set specific contract terms for PBMs and require “one-size-fits-all” reimbursements for different types of pharmacies. This government overreach would restrict practices and tools PBMs use to reach optimal deals and savings, and could raise the cost of health plans. 

Some proponents of this bill may claim that it is a free market solution, but that could not be further from the truth. In fact, the bill’s own fiscal note describes part of it as “the opposite of free market.” HB 2632 is one of many attempts by community pharmacists throughout the country to tamper with the market in a way that benefits them. In North Dakota, they have succeeded in banning their competitors altogether. 

The best way to lower the price of prescription medication is to embrace truly free market solutions. Heavy-handed regulations that insert government into private contracts will only result in more problems. As such, ATR urges lawmakers to vote NO on HB 2632.

 

Sincerely,

Grover Norquist

President

Americans for Tax Reform

Photo Credit: Roosevelt Institute


Louisiana HB 599 Would Provide Overdue Tax Relief

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Posted by ATR on Tuesday, May 14th, 2019, 4:31 PM PERMALINK

After promising Louisianans he would not raise taxes, in 2016, Governor John Bel Edwards (D) dealt taxpayers the largest tax hike in state history in the form of a 25 percent sales tax increase. That $1.5 billion tax hike, which raised the sales tax rate from 4 cents to 5 cents on the dollar, was sold as “temporary” and set to expire on June 30, 2018.

Of course, that claim was not true.

Governor Edwards called three special sessions last year until 0.45 percentage points of the “temporary” 1 percentage point sales tax hike was renewed. Under current law, this tax increase – which is accurately described as a tax increase since the entire penny was supposed to expire – is supposed to remain in place through June 30, 2025 unless lawmakers take actions to remove it sooner.

Fortunately, Representative Lance Harris’s House Bill 599 would do just that. If implemented, HB 599 would phase out the 0.45-cent sales tax increase by reducing it by 0.10 cents on July 1 in 2020, 2021, and 2022 before it is fully repealed and the sales tax rate is returned to 4 percent on July 1, 2023. Over 5 years, HB 599 would provide all hardworking taxpayers across Louisiana with $914 million in owed tax relief.

Grover Norquist, president and founder of Americans for Tax Reform, sent Louisiana lawmakers a letter in support of HB 599. The full text of the letter is pasted below:

May 14, 2019

To: Members of the Louisiana House of Representatives
From: Americans for Tax Reform

Re: Support House Bill 599

Dear Representative,

On behalf of Americans for Tax Reform (ATR) and our supporters across Louisiana, I urge you to support House Bill 599, legislation that would provide some of the much-needed tax relief that is owed to the hardworking taxpayers across the Pelican State.

Louisiana’s spending has been increasing well beyond the rate of population and inflation for years, and its state and local spending per capita is significantly greater than every other state in the Southeast. Yet, in 2016, Louisiana taxpayers were still dealt the largest tax increase in state history in the form of a 25 percent sales tax hike that took the rate from 4 to 5 cents on the dollar.

This massive $1.5 billion tax increase was supposed to expire on June 30th 2018, but predictably, that was not the case. Last year, Governor John Bel Edwards (D) called three special sessions until 0.45 cents of the expiring “clean penny” was renewed. This tax increase – which was indeed a tax increase since the entire penny was supposed to expire – will be in place through June 30, 2025.

Fortunately for Louisianans, if implemented, HB 599 would provide some of the relief that is owed to taxpayers by phasing out the 0.45 percentage point tax increase quicker than would be the case under current law. Under HB 599, the state sales tax rate would be reduced to 4.35 percent from 4.45 percent on July 1, 2020, then to 4.25 percent on July 1, 2021, then to 4.15 percent on July 1, 2022, and finally, to 4 percent on July 1, 2023.

There is simply no justification for voting against HB 599. In addition to sales tax relief being owed to Louisianans, there is a wealth of social science demonstrating the economic harm that results from higher levels of taxation. John Hood, chairman of the John Locke Foundation, a Raleigh, N.C.-based think tank, surveyed over 680 peer-reviewed academic journal articles on fiscal policy published over the past quarter century. According to Hood, “the preponderance of peer-reviewed research finds a negative relationship between state taxes and measures such as job creation and income growth.”

Tax Foundation economist William McBride reviewed academic literature going back three decades and found, “while there are a variety of methods and data sources, 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 such, ATR supports HB 599, which would provide $914,000,000 in owed tax relief to all taxpayers across the Pelican State over 5 years, and urges lawmakers to vote YES.

Sincerely,
Grover Norquist
President
Americans for Tax Reform

Photo Credit: FordAV


Traverse City's "Free" Public WiFi A Let Down

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Posted by ATR on Friday, May 10th, 2019, 5:29 PM PERMALINK

Surprise, surprise. Traverse City, Michigan’s “free” public WiFi has turned out to be a complete flop.

“The feedback I’ve had is it’s not working as well as it should,” said Jean Derenzy,

CEO of the Downtown Development Authority (DDA), at the entity’s April board meeting.

Traverse City’s “free” WiFi – which is intended to only work outside in the downtown area – was started through a partnership between Traverse City Light & Power (TCL&P) and the DDA back in 2014. TCL&P fronted $790,000 to build out the network and the DDA promised to pay the utility back in installments of $65,000 a year through 2024.

A May 2 article in The Ticker explains, based on DDA data, that around 1,000 uses logged on to the network in a one week period. According to the Traverse City website, its official population is14,572 and its daytime population is more than double that amount.

Adding insult to injury, instead of just cutting losses (which will continue to escalate), officials are wasting more time and resources on “improvements.” While the exact plan for the next phase of the “free” WiFi is TBD, they are considering expanding signal locals and bandwith, expanding the WiFi to be citywide, and using the WiFi for a security camera network.

Meanwhile, TCL&P is moving forward with an ill-advised broadband network. Much like Traverse City's “free” WiFi, government-owned networks (GONs) have a track record of disappointment and failure.

Grover Norquist, president and founder of Americans for Tax Reform, sent members of the TCL&P board a letter last month, urging them to call off the GON before it soaks up more public resources. The full text of the letter is below:

April 1, 2019 

To: Members of the Traverse City Light & Power Board 

From: Americans for Tax Reform 

Re: Don’t be fooled by GON proponents 

Dear Board Member, 

On behalf of Americans for Tax Reform (ATR) and supporters across Traverse City, I write to urge you not to be fooled by proponents of the Government-Owned Network (GON) plan pending before you. As has been demonstrated by the GON disasters throughout the country, where GONs have either failed outright or are being propped up by taxpayers, government entities are not capable of successfully playing in the broadband space. 

Even in its early phases, Traverse City Light & Power’s GON experiment seems on track to end in tragedy. Its partner, Fujitsu, which was selected to create a “business, design and operational plan,” has a less than stellar track record when it comes to GONs. Just take a look at KentuckyWired, for example.

Kentucky officials selected to work with Fujitsu for its statewide GON, KentuckyWired, which was sold to taxpayers as a $350 million project that would be complete by the spring of 2016. Now, around three years past its intended date of completion, less than a third of the network has been installed, none of it is usable, and a recent report from the state auditor concludes that taxpayers will end up wasting around $1.5 billion on this redundant network over its 30-year life. 

In addition, city officials should also note that proponents of Traverse City Light & Power’s GON plan cannot help but see the outcome through rose-colored glasses. It is in the best interest of Fujitsu – which has been chosen to determine the extent to which there is a business case for the network – if the city moves forward with a plan, as it would also be the equipment provider and eventual operator. 

Fujitsu aside, a GON in Traverse City would be a huge mistake. As has been demonstrated by dozens of GON failures throughout the country, the construction and maintenance of broadband networks are not functions that government entities are well suited to take on, as they require ongoing and expensive maintenance and upgrades in order to function properly. Too late in the game, government officials realize the costs for such undertakings were grossly underestimated, and that they lack the necessary financial resources and expertise to remain up-to-date in such a rapidly changing industry. 

Along with underestimated costs, demand for GONs is often significantly overestimated. Despite having access to a GON, consumers often choose to remain with their trusted private sector providers. Underestimated costs and overestimated demand is a recipe for a financial gap that the city’s taxpayers and utility ratepayers will be forced to fill.  

Rather than moving forward with this GON project, Traverse City officials should follow the lead of those in Solon, Ohio, who recently rejected a proposal that would have given Fujitsu $45,000 for a feasibility study for a potential GON. ATR opposes Traverse City Light & Power’s GON plan and urges officials to pull the plug before its too late, and city’s taxpayers and utility ratepayers are left on the hook with nothing to show for it. 

Sincerely, 

Grover Norquist 

President 

Americans for Tax Reform

Photo Credit: flickr Marco Verch


Kelli Ward Arizona GOP Chairwoman Supports Massive Tax Hike

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Posted by ATR on Tuesday, April 30th, 2019, 12:39 PM PERMALINK

Arizonans face a steep tax increase under a plan being pushed by so-called conservative Kelli Ward, the chairwoman of the Arizona Republican Party.

Senate Concurrent Resolution 1001 and House Concurrent Resolution 2024, if approved by the legislature, would ask voters to approve a permanent one cent sales tax increase. This would result in Arizona taxpayers permanently paying a sales tax rate that is about 7 percent higher than what is paid today.

“Kelli Ward promised the people of Arizona in writing that she would oppose any and all tax increases. She just called for a sales tax hike that would damage every citizen of Arizona,” said Grover Norquist, President of Americans for Tax Reform.

Kelli Ward signed the Taxpayer Protection Pledge in her primary challenge to Senator John McCain, making a written commitment Arizonans that she would oppose tax increases.

Why is she now taking the opposite position as Chairwoman and supporting a massive tax increase that would inflict a great deal of harm on the individual taxpayers, families, and employers across the Grand Canyon State?

 

Americans for Tax Reform warned Arizona lawmakers of these negative consequences in the following letter: 

 

Dear Representative,

On behalf of Americans for Tax Reform (ATR) and our supporters across Arizona, I urge you to reject Senate Concurrent Resolution 1001 and its companion, House Concurrent Resolution 2024, which would ask voters to approve a permanent $1.2 billion sales tax increase. If implemented, this massive tax hike would inflict a great deal of harm on hardworking individual taxpayers, families, and employers across the Grand Canyon State.

There is a wealth of social science demonstrating the economic harm that results from raising taxes. John Hood, chairman of the John Locke Foundation, a Raleigh, N.C.-based think tank, surveyed over 680 peer-reviewed academic journal articles on fiscal policy published over the past quarter century. According to Hood, “the preponderance of peer-reviewed research finds a negative relationship between state taxes and measures such as job creation and income growth.”

Tax Foundation economist William McBride reviewed academic literature going back three decades and found, “while there are a variety of methods and data sources, 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.”

In addition to being bad policy, tax increases are also bad politics. An ATR analysis of recent election results finds that voters in both red and blue states overwhelmingly rejected tax increases at the ballot. Election outcomes are the most accurate polls available, and they show that the public is opposed to tax increases. 

Arizona is currently experiencing a $1 billion surplus. Rather than searching for new ways separate your constituents from more of their income, lawmakers should use existing revenue more efficiently.

ATR opposes SCR 1001 and HCR 2024 and urges lawmakers to vote NO. Voting YES would be scored as a violation of the Taxpayer Protection Pledge. 

Sincerely,

Grover Norquist

President

Americans for Tax Reform

Photo Credit: David Grant


WSJ Criticizes Florida Importation Proposals

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Posted by ATR on Wednesday, April 17th, 2019, 3:03 PM PERMALINK

In a new editorial, Importing Bad Ideas on Drug Prices, The Wall Street Journal criticizes legislation in Florida that would require the state to set up a program to import drugs from Canada.  

The importation of drugs from countries with socialized medicine is a policy that has long been supported by U.S. Senator Bernie Sanders and opposed by proponents of free markets and limited government. Yet in Florida, importation has been advancing with Republican support. The WSJ editorial concludes: 

“Democrats once pushed importation as disguised price controls, but Republicans who understand markets helped to stop it. With Republicans now aping Democrats, this is a dangerous moment for the world’s most productive and dynamic market for medicine.”

Indeed, the importation of drugs from Canada is a highly misguided idea. While importation may sound like a reasonable free market solution, it is actually a clever ploy to trick proponents of limited government into supporting socialist policies that would jeopardize the development of the next generation of life-saving, life-improving medicines.

Despite the lengthy, complex, and costly process for developing prescription medication in the United States, it is still the world’s freest market for medicine, as all other countries have price controls and other regulations in place that are designed to forcefully reduce drug costs. Since those pricing policies make it hard for manufacturers to recover the cost of making medication, they ultimately suppress innovation and result in the rest of the world freeloading off of U.S. investment in research and development.

The importation of price-controlled medication from other countries would come with the importation of foreign price controls into the U.S. In the end, the importation of foreign price controls would result in the same negative consequences as outright price controls – fewer resources available to invest in the research and development needed for future medications. 

Adding insult to injury, it is also highly unlikely that importation would actually lower costs for patients. In their editorial, the WSJ raises skepticism about the practicality of importation and whether or not it would actually result in savings:

“One question is why Canada would allow the U.S. to siphon its drug stocks. Canada’s drug supply for 37 million residents isn’t brimming with extra products to sell to 21 million Floridians, even on a limited scale.

U.S. manufacturers sell drugs for Canadians to Canadian wholesalers. Companies are not going to sell Canadians more drugs so the product can be exported to the U.S. via price arbitrage, and such secondary sales can be prohibited in contracts. Canada could also ban such sales lest it risk losing deals on drugs for their own people.

Savings may also be elusive. When federal importation was floated in the early 2000s, an FDA analysis found that five of seven of America’s best-selling generic drugs for chronic conditions were cheaper than Canadian generics. One product didn’t have a generic available in Canada. This analysis is outdated but the basics are still relevant: Nine in 10 prescriptions in the U.S. are generic, versus roughly 70% in Canada, which means the U.S. enjoys much higher savings from generics.”

Despite the good intentions behind the importation proposals in Florida, they are still bad policy. The house importation bill -- House Bill 19 -- passed the full house last week, and the senate version -- Senate Bill 1528 -- which is different than what was approved by the house, will be considered by the Appropriations Committee on Thursday. 

Photo Credit: Matt Browne


Traverse City Should Call off GON

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Posted by ATR on Thursday, April 4th, 2019, 3:44 PM PERMALINK

The Traverse City Light & Power Board is moving forward with an ill-advised Government-Owned Network (GON). Earlier this week, Grover Norquist sent letters to members of the Traverse City Light & Power Board, urging them to call off this project before it ends in tragedy for taxpayers and utility ratepayers. The full text of the letter is pasted below.

 

April 1, 2019 

To: Members of the Traverse City Light & Power Board 

From: Americans for Tax Reform 

Re: Don’t be fooled by GON proponents 

 

Dear Board Member, 

 

On behalf of Americans for Tax Reform (ATR) and supporters across Traverse City, I write to urge you not to be fooled by proponents of the Government-Owned Network (GON) plan pending before you. As has been demonstrated by the GON disasters throughout the country, where GONs have either failed outright or are being propped up by taxpayers, government entities are not capable of successfully playing in the broadband space. 

Even in its early phases, Traverse City Light & Power’s GON experiment seems on track to end in tragedy. Its partner, Fujitsu, which was selected to create a “business, design and operational plan,” has a less than stellar track record when it comes to GONs. Just take a look at KentuckyWired, for example.

Kentucky officials selected to work with Fujitsu for its statewide GON, KentuckyWired, which was sold to taxpayers as a $350 million project that would be complete by the spring of 2016. Now, around three years past its intended date of completion, less than a third of the network has been installed, none of it is usable, and a recent report from the state auditor concludes that taxpayers will end up wasting around $1.5 billion on this redundant network over its 30-year life. 

In addition, city officials should also note that proponents of Traverse City Light & Power’s GON plan cannot help but see the outcome through rose-colored glasses. It is in the best interest of Fujitsu – which has been chosen to determine the extent to which there is a business case for the network – if the city moves forward with a plan, as it would also be the equipment provider and eventual operator. 

Fujitsu aside, a GON in Traverse City would be a huge mistake. As has been demonstrated by dozens of GON failures throughout the country, the construction and maintenance of broadband networks are not functions that government entities are well suited to take on, as they require ongoing and expensive maintenance and upgrades in order to function properly. Too late in the game, government officials realize the costs for such undertakings were grossly underestimated, and that they lack the necessary financial resources and expertise to remain up-to-date in such a rapidly changing industry. 

Along with underestimated costs, demand for GONs is often significantly overestimated. Despite having access to a GON, consumers often choose to remain with their trusted private sector providers. Underestimated costs and overestimated demand is a recipe for a financial gap that the city’s taxpayers and utility ratepayers will be forced to fill.  

Rather than moving forward with this GON project, Traverse City officials should follow the lead of those in Solon, Ohio, who recently rejected a proposal that would have given Fujitsu $45,000 for a feasibility study for a potential GON. ATR opposes Traverse City Light & Power’s GON plan and urges officials to pull the plug before its too late, and city’s taxpayers and utility ratepayers are left on the hook with nothing to show for it. 

 

Sincerely, 

 

Grover Norquist 

President 

Americans for Tax Reform

 

Photo Credit: Tony Webster


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