Elias Korpela

California Democrats Seek to Introduce Yet Another Tax on California Gun Buyers

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Posted by Elias Korpela on Friday, April 9th, 2021, 5:49 PM PERMALINK

Despite current federal excise taxes on firearms and California’s already onerous gun laws, California lawmakers are eager to add another tax on guns and ammunition sales. 
California Assemblyman Marc Levine (D) introduced legislation that would add an excise tax on gun retailers for firearm and ammunition sales. This bill would add a 25-dollar tax on the sale of every new gun purchased in California as well as a new tax on ammunition sales at a yet undetermined amount. The money raised by the tax would be used to fund violence prevention programs like California’s CalVIP program. 
Assemblyman Levine explained his support for the bill arguing that “Gun violence will not end on its own” and that it is critical to “take responsible action to end the public health crisis that is gun violence in California and in our country.” 
While stopping violence using guns is a worthwhile goal, the legislation proposed by Assemblymember Levine wholly misses its mark. 
First, the legislation would do little to curb violence using guns. Citing multiple studies, RAND Cooperation in 2018 concluded that “moderate tax increases on guns or ammunition would do little to disrupt hunting or recreational gun use”
Similarly, the legislation would do little in discouraging legal and illegal gun purchases. According to a 2018 UC Davis Health survey, despite some of the nation’s strictest gun laws, “roughly 25 percent of those who purchased their most recent firearm in California reported that they did not undergo a background check.” Even with strict gun laws, increasing the price of guns has little to no effect on someone’s decision to obtain a firearm.  
Finally, Levin’s legislation would only add another tax to the litany of other taxes and fees on Californians. According to the nonpartisan Tax Policy Center, “The federal government already imposes about $750 million in excise taxes on the import and retail sale of guns and ammunition. Handguns are taxed at 10 percent, and other guns and ammunition are taxed at 11 percent.” Even in California, the state annually collects $6 million in gun fees and requires fees like a $31 Dealer Record of Sale Fee and a $5 Safety and Enforcement Fee. Moreover, the violence prevention programs the bill would fund already received $30 million in state funding. 
Levine’s bill does little to curb violence using guns. It is clear that this new bill is nothing more than a new tax and a cash grab by desperate California Democrats looking to take even more from Californian taxpayers’ wallets and to further infringe on their 2nd Amendment rights. 

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West Virginia Governor Jim Justice Signs the Most Expansive Education Savings Account Legislation in the Nation

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Posted by Elias Korpela on Wednesday, March 31st, 2021, 2:22 PM PERMALINK

ALEC ranked West Virginia’s education system as the fifth worst in the country and gave it failing grades for its lack of School Choice programs and extensive regulatory burden on homeschools. Now, new legislation seeks to change that. 

On March 29, 2021, West Virginia Governor Jim Justice and the West Virginia legislature put students first when they signed into law the most expansive education savings account legislation in the nation. This law refocuses education funding on students not expensive administrative bureaucracy and provides state funds for students in public schools to use on a wide array of education expenses. 

HB 2013, was first introduced by West Virginia Delegate Joe Carey Ellington Jr. (R) on February 10, 2021. It creates the Hope Scholarship, which provides each child with an educational savings account of $4,600 per year for private and home-schooling expenses. This money would be directly paid to families and allow families to spend this money on a wide range of different educational expenses. Such items include “tutors, books, technology, broadband, special-needs therapies, and even college credits.”

Prior to this legislation, school choice was the privilege of only the wealthy elites. Educational Savings accounts expand that choice to almost every student in West Virginia regardless of their income or zip code. These educational savings accounts will provide parents, instead of government bureaucrats, the ability to make decisions that best fulfill the academic demands of their children and allow each child the best chance to succeed. 

By allowing all students currently enrolled at public schools for kindergarten or for a minimum of 45 days in schools to apply for an account, Hope scholarships give West Virginian families control over their own education  While some states like Mississippi and have education savings account programs, both states limit their educational savings account programs to children with special needs. By not limiting the program based on need, income, or geography, Heritage Foundation estimated that more than “90% of the student population in West Virginia will be eligible immediately upon implementation of the program in 2022.”

Studies have repeatedly shown that all students can’t thrive under one-size-fits-all public education programs. By giving parents the resources and the ability to choose plans that fit their children the best, West Virginia ensures that every taxpayer dollar spent on education is used efficiently and effectively. 

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Democrats Propose a Litany of New Tax Increases in Connecticut

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Posted by Elias Korpela on Wednesday, March 31st, 2021, 1:58 PM PERMALINK

On March 15th, the Connecticut General Assembly's joint Finance, Revenue and Bonding Committee held a hearing that considered proposals to increase taxes on Connecticut businesses and families. This latest move to raise taxes comes as Democratic lawmakers in Connecticut have pressured Governor Ned Lamond (D) to increase spending and taxes on Connecticut businesses and families.

During the hearing, proposals to raise taxes included an increase of the capital gains tax to 13.99%, an increase of top income tax rate to 13% from 6.99%, an overall increase of the estate and corporate tax, and the introduction of a statewide property tax. These proposals join the long list of other proposals meant to increase taxes in Connecticut.

In January, Sen. Martin Looney (D) proposed a mansion tax of $1 for every $1000 of a property's value over $300,000. Similarly, the Labor and Public Employees Committee recently approved a partisan bill that would give public sector unions enormous power to convince new government employees to pay union dues against their will and "codify union membership cards into state law."

With Connecticut already having some of the nation's highest taxes, an increase in taxes would only further worsen the state's tax climate. According to the Tax Foundation, Connecticut's State Business Tax climate ranks 47th in the nation. Connecticut's individual, property, and corporate taxes are among the highest in the nation. Adding even more to the tax burden will just unnecessarily burden and set back businesses and families already hurting from the COVID-19 economic shutdowns.

Thankfully, however, the latest budget proposed by Gov. Ned Lamont does not include significant tax increases. The governor put it simply, "Why would you want to raise taxes when you don't have to?" 

What the Governor is referring to is that Connecticut has enjoyed higher than expected revenues, largely due to New York City commuters being stuck at home. On top of that, the state now is flush with “relief” money from Congress. 

Hopefully, the governor will have the wherewithal to stick to his plan to not raises taxes and his tax-hungry Democratic colleagues fail to burden Connecticut with tax increases.

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Tennessee Lawmakers Look To Repeal Professional Privilege Tax

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Posted by Elias Korpela on Friday, March 19th, 2021, 5:34 PM PERMALINK

Tennessee recently became a true no-income-tax state, but a professional privilege tax is still on the books and paid by members of seven professions. The occupations hit with this discriminatory tax include osteopathic physicians, physicians, attorneys, securities agents, broker-dealers, investment advisors, and lobbyists. 

This tax had originally applied to 22 professions, but two years ago Governor Bill Lee and Tennessee legislators repealed the professional privilege tax for 15 professions. The tax was repealed for accountants, architects, athlete agents, audiologists, chiropractors, dentists, engineers, landscape architects, optometrists, pharmacists, podiatrists, psychologists, real estate brokers, speech pathologists, and veterinarians. 

While the list of occupations required to pay this tax has substantially decreased, continuing to impose this tax, even if only on seven professions, wrongly assumes that working and making a living is a privilege granted by the state. To help make Tennessee an even more attractive destination for people and businesses, Tennessee Representative Ron Gant (R) has introduced HB 519. This bill and its companion Senate bill, SB 884, would eliminate the remainder of the professional privilege tax.

HB 519 was discussed in the Tennessee House Finance, Ways, and Means Subcommittee on March 10. During that hearing, Representative Chris Todd (R) commented that the bill was “long overdue.”

“Tennessee’s professional ‘privilege’ tax, used unfortunately to balance budgets ‘temporarily’ in 1992 and again in 2002, is one of only six such taxes, along with similar taxes in Alabama, Connecticut, Delaware, Montana, and North Carolina,” explained a joint letter sent by a coalition of business community associations and taxpayer organizations to Governor Bill Lee and Tennessee legislators. That letter noted that “Tennessee is a very good state in which to conduct business, but we believe it’s an opportune time to: 1) send a clear, across-the-board message that it’s a right and not a “privilege” to run a business in Tennessee; 2) eliminate a double tax on professionals who already are paying licensing fees; 3) provide relief to many professionals who practice infrequently, primarily offer charity services to low-income individuals or are paying off graduate school debt; 4) end a cumbersome process to pay the tax online; 5) address the constitutionally suspect nature of this discriminatory tax; and 6) improve our business environment by reducing the indirect costs that many of our customers wind up paying.” 

All of those are fantastic reasons for Tennessee lawmakers to do away with this discriminatory levy once and for all in 2021. With the completed phaseout of the Hall Tax, a tax on investment income, Tennessee became the eighth state in the U.S. to not impose any form of state income tax at the start of 2021. The professional privilege tax is Tennessee’s last vestige of an income tax and pretty soon that will hopefully meet the same fate as the Hall Tax, which would be great news for Tennessee taxpayers.

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New Study Confirms Big Spending on Jails Doesn’t Mean Improved Public Safety

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Posted by Elias Korpela on Friday, March 12th, 2021, 5:27 PM PERMALINK

A new study conducted by the Pew Charitable Trust found that while jail spending has topped $25 billion – an increase of 13% between 2007 and 2017 – crime rates, jail admission, and jail populations have all decreased.

The study shows how ensuring public safety while reducing jail spending and jail population can occur simultaneously and provide significant cost-saving benefits for states, localities, and taxpayers.

The Pew Charitable Trust published the study in January. The study used data from the “Census Bureau’s Annual Survey of State and Local Finances, the FBI’s Uniform Crime Reports (UCR), and “Jail Inmates in 2018” from the Bureau of Justice Statistics (BJS).” 

Here are the key findings from the study:

  • “Jail and other local corrections costs had risen sixfold since 1977, with jail costs reaching $25 billion.”
  • “Almost 2 in 5 dollars spent on state and local correctional institutions went to jails.”
  • “About 1 in 17 county dollars was spent on jails.”
  • “A 20% decrease in crime and a 19% drop in jail admissions since 2007 had not led to reduced jail spending.”
  • “Jail spending increased 13% between 2007 and 2017.”
  • Between 2007 and 2017, “jail admissions dropped 19%, from 13.1 million to 10.6 million, and the average daily jail population declined by 4%, or 27,500 people.”
  • “The portion of local budgets spent on jails did not correlate with state crime rates.”


It is also important to note the effect of COVID-19 on jail populations. Due to the risk of increased COVID-19 exposure and transmission, jails from March to May 2020 “reduced jail populations by about 31% nationwide.” This reduction in jail populations is in line with nationwide efforts to reduce local government spending on jails, especially after increased economic pressure on states and localities to cut spending in light of COVID-19.

With the great success states have seen following Texas’ lead on criminal justice reform, it is clear that a conservative approach built on incentives, work, and removing counterproductive government barriers leads to a better, more efficient criminal justice system. 

At the local jail level, bad policies like excessive fines and fees, suspending driver’s licenses for offenses unrelated to road safety, and a lack of focus on addiction, contribute to more people going to jail more frequently than should be necessary. 

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Booze on the Go

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Posted by Elias Korpela on Monday, March 8th, 2021, 5:43 PM PERMALINK

One of the results of the deregulation that occurred in response to the pandemic is that Americans who live in more than 30 states now have the liberty to order a margarita with their Mexican takeout, a bottle of wine with pizza delivery, and an Old Fashioned to pair with a burger to-go from favorite local joints.

Before the COVID-19 pandemic hit, only Florida and Mississippi allowed the sale of cocktails to go on a limited basis. However, as restaurants and bars were forced to shut down and restrict in-person dining last spring, these establishments had to rely on takeout and delivery to pay their employees, rent, and keep their businesses afloat. With alcohol sales generating up to 25% of revenues for many businesses that sell alcohol, states began to introduce legislation or emergency executive orders that temporarily legalized the delivery and sale of alcohol to-go. Now many of those temporary orders are being permanently codified by state lawmakers.

With almost a year having passed since former President Trump declared the COVID-19 a national emergency, lawmakers in states like Iowa and Ohio have passed legislation making to-go alcohol sales permanent. Iowa Governor Kim Reynolds (R) was one of the first governors to permanently authorize to-go sales of alcohol last June when she signed HF 2540. Ohio Governor Mike DeWine (R) followed suit in October when he signed HR 669, which permanently legalized the sale and delivery of alcoholic beverages by restaurants and bars in the Buckeye State.

Lawmakers in 26 other states have introduced or filed legislation this year to make to-go alcohol sales permanent. The effort to reduce and repeal unnecessary, commerce-restricting regulations on restaurants and bars selling alcohol to-go has achieved bipartisan support. Red and blue states alike – such as Kentucky, Florida, Texas, New York, and California -- have all seen legislation introduced to legalize alcohol to-go.

Many public policy and behavioral changes that occurred during the pandemic will persist long after its passing. Ubiquitous permission of to-go alcohol sales appears poised to be a permanent fixture of post-pandemic life. That’s good news for business owners who will generate more sales, consumers who will have increased convenience, and government coffers that will receive more excise tax collections.

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More States Pass COVID-19 Legal Liability Protections To Protect Businesses From Frivolous and Costly Lawsuits

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Posted by Elias Korpela on Friday, March 5th, 2021, 6:13 PM PERMALINK

Even with businesses implementing COVID-19 safety precautions, they can still be the target of frivolous, costly, and time-consuming lawsuits, as many trial lawyers view the ongoing pandemic as an opportunity to line their pockets. That’s why most states have passed COVID-19 legal liability limits to protect businesses from such lawsuits.

Despite an earlier veto by Wisconsin Governor Tony Evers (D) of a bill that would provide COVID-19 legal liability limits for Badger State businesses, on February 23rd the Republican-led Wisconsin Legislature passed a veto-proof bill that should lead to the enactment of COVID-19 legal liability protections in Wisconsin despite the Governor’s opposition. 

Legislative action is still needed in both red and blue states to protect businesses from being the target of unjustified, COVID-19-relatd lawsuits. Legislators in South Carolina recently moved to take such action, passing S. 147 in the South Carolina Senate. S. 147 provides Palmetto State businesses with protection from frivolous lawsuits related to COVID-19. That bill now moves to the South Carolina House. If approved there, the bill will head to the desk of Governor Henry McMaster (R), a Taxpayer Protection Pledge signer, who emphasized the importance of passing COVID-19 liability protections in his January 13 State of the State Address. 

“Another way we can also help our small businesses is by providing them common sense protection from unfounded pandemic related liability, Governor McMaster during that address. “Currently, 32 states have adopted some degree of COVID-19 liability protections. The pandemic and the various governmental and private sector responses to it are likely to present novel questions of law and fact. Our businesses, our healthcare providers, and educational institutions should not be put at risk or competitive disadvantage through no fault of their own, particularly after following safety protocols.”

While legislation to provide COVID-19 legal liability protection moves closer to enactment in South Carolina, such liability limits are on the fast track to passage in Florida. Bills like SB 74 and SB 72 would provide COVID-19 legal liability for healthcare facilities and non-healthcare facilities. These bills are supported by over 100 local chambers of commerce across Florida. Public opinion polls show 74% of respondents support enactment of pandemic-related legal liability protections in Florida.

As states continue to loosen pandemic restrictions and people begin to return to normalcy, lawmakers must work quickly to pass COVID-19 legal liability protections. Businesses should be encouraged to open safely without having to worry about overzealous and opportunistic trial lawyers.

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States Must Act to Prevent the Taxation of PPP Relief Aid

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Posted by Elias Korpela on Friday, February 26th, 2021, 11:52 AM PERMALINK

The Paycheck Protection Program (PPP), created in March 2020 as part of the CARES Act, was meant to help businesses retain workers and avoiding permanent closure amid government-mandated lockdowns. PPP loans issued to businesses were forgivable and not subject to federal income tax, so long as 60% of the loans went to keeping employees on the payroll. In some states, however, employers now face the prospect of being hit with higher state taxes as a result of accepting federal relief. 

Businesses like Macromatic Industrial Controls in Wisconsin used PPP loans to help keep their workers employed. With taxes due this spring, the company’s president Steve Sundlov had been raising concerns about PPP loans being taxed by the state.

“The PPP money was again presented to us as tax-free money, and those were the rules that we were give,” Sundlov said, adding that “now, it seems like the rules are changing and that’s very difficult to deal with.” 

Though it had originally appeared as though Governor Tony Evers (D) was going to subject PPP relief to state taxation, after increasing pressure from the Republican-controlled Wisconsin legislature, Gov. Evers agreed last week to sign into law a bill exempting PPP loans from state income tax. 

The prospect of state taxation of PPP loans that Wisconsin lawmakers rectified last week is a problem that’s not limited to Wisconsin. While it was good to see Governor Evers make the right decision, the threat of state taxation of PPP loans continues to hang over employers in many other states. Governors and legislators in a number of states still need to take action to ensure businesses are not subject to higher state taxes on account of their utilization of pandemic aid authorized under the CARES Act.

Unless state legislators in GeorgiaKentuckyMaine, and 16 other states take action soon, PPP relief aid that businesses received during the pandemic will be subject to state taxation because state lawmakers declined to exempt PPP loans as taxable income and disallowed expense deductions. The good news is that legislators in some of those states are in the process of taking such action.

Meanwhile in Maine, the Democrats who run state government seem less concerned about protecting businesses from surprise tax bills on their PPP relief aid. Gov. Janet Mills (D) introduced an executive budget on January 25, 2021 that did not exempt forgiven PPP loans from state income tax. The Governor argued that by taxing this relief aid, the state could get an additional $100 million revenue shortfall on top of the windfall of additional federal revenue that Congress is about to send.

After public backlash, Gov. Mills announced that she would look towards additional aid from the federal government to avoid taxing PPP funds, which the state is sure to get as part of the $1.9 trillion spending package now working its way through Congress.

While efforts to exempt PPP aid from state income tax are encouraging and necessary, lawmakers in many states still need to approve conformity legislation before taxes come due this spring. While Mr. Sundlov’s worries that he will “owe tens of thousands of dollars in income tax” have abated thanks to the prudent action recently taken by Wisconsin lawmakers to conform with the CARES Act’s tax exemption for pandemic relief funds, thousands of other small businesses across the U.S. still face the prospect of unexpected state tax bills. Unless lawmakers in those states act soon, some employers might have to resort to the sort of payroll reductions that PPP loans and the other liquidity enhancing provisions of the CARES Act were designed to prevent. 

Photo Credit: Robert English

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