John Neher

Nevada Rams Tax Hike & Anti-Property Rights Bills Through Over Holiday Weekend

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Posted by John Neher on Wednesday, June 16th, 2021, 1:41 PM PERMALINK

Tax hikes are not popular. So what to do if you are a state legislator trying to shove through costly tax increases? For Nevada legislators, the answer was to avoid public scrutiny with a total lack of transparency, shoving bills through with little review over Memorial Day weekend.

The state’s legislative session ended with unnecessary mining tax increases, along with a bill that would permit local governments to collect lodging taxes from short-term rental businesses like Airbnb.

A few Republicans in the Democrat-controlled Nevada Legislature went along with inflicting new taxes on gold and silver mining operations by passing Assembly Bill 495. Democrats needed a two-thirds majority to push these levies, per the Nevada constitution. Assemblyman Tom Roberts, R-Las Vegas, and Assemblywoman Jill Tolles, R-Reno, voted with the Democratic majority, moving the bill on to the Senate.

Silver and gold mines that report gross revenue of $20 million to $150 million will be charged 0.75% excise tax, while a 1.1% tax will be charged on mines that report any higher. The plan is expected to cost $88 million a year in new tax burdens, with the revenue marked for education. Gov. Steve Sisolak called the tax hike “one of the most significant steps our state could take on our road to recovery.” Yet, most advocates in the state say that almost $1 billion is needed to adequately address public school funding, which indicates more tax hikes may be coming. These tax hikes are completely unnecessary even from a big spending perspective. Nevada came out of the pandemic flush with billions in federal bailout cash. For context, Nevada’s entire budget is $4.5 billion. So a tax increase to yield $88 million in just a year seems like an unnecessary initiative by Democrats in the Mining State.

Another bad bill that passed will impose damaging restrictions on short-term rental properties. Assembly Bill 363 will apply to the most populous counties and cities in Nevada and will add restrictions to how short-term rentals operate.

As ATR wrote in a letter to legislators:

“AB 363 is the opposite of free market policy, it instead places onerous rules on short-term rentals that make a mockery of property rights, and make it difficult for many to operate.

“In particular, rules requiring a 500 ft. minimum distance between units, and rules requiring a 2500 ft. distance from existing hotels, would clearly force many hosts to stop offering their properties. This would have a harsh effect on these hosts’ income, and take away options for travelers, ultimately this would also hurt tourism activity in the state.” 

Higher taxes, and absurd regulations that ignore property rights, not the way for Nevada to close out their bi-annual session. Families and businesses are watching the state go in the wrong direction by increasing burdens and following the lead of states like California, rather than sticking with the pro-taxpayer policies that have helped the state grow.

Photo Credit: Jimmy Everson DVM, Flickr

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Tennessee Governor Bill Lee Enacts Reform Protecting Free Enterprise, Blocking Anti-competitive Regulation

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Posted by John Neher on Monday, May 17th, 2021, 2:48 PM PERMALINK

On May 4, during the final week of the 2021 legislative session, Tennessee Governor Bill Lee (R) signed SB 872into law. SB 872 is a smart pro-consumer reform that bars local governments from regulating a host of popular online eCommerce platforms, such as AirBnB, VRBO, Uber, and Lyft. The idea is to stop local governments from putting onerous, unnecessary, and anti-competitive regulations on ridesharing, homesharing, and other ecommerce platforms, thus resulting in higher consumer prices and less selection. Such decisions will remain the purview of the Tennessee General Assembly. 

SB 872, sponsored by Sen. John Stevens (R), does more than protect businesses and consumers in the ridesharing and homesharing spaces. SB 872 also prohibits local governments from regulating the operation of an online marketplace facilitator or requiring an online marketplace to provide personally identifiable information of users. This means that counties and municipalities cannot regulate or tax marketplace facilitators such as eBay, Etsy, Instacart and others who facilitate transactions among users. Sen. Stevens said this change will prevent overregulation and will increase clarity by ensuring there is not a patchwork of regulations on online marketplaces across the state. 

“Cities in other states have attempted to impose minimum wage laws on ridesharing services at the behest of taxi cartels, place limits on fees charged by delivery services, and meddle in the independent contractor relationship that has significantly benefited self-employed individuals using these platforms to earn a living,” writes Justin Owen president of the Beacon Center, a Nashville-based think tank. “None of these regulatory attempts would be allowed under the new Tennessee law.” 

This reform will ensure statewide uniformity of regulation in Tennessee for emerging industries and technologies. Beacon Center’s Owen praises the work done by state lawmakers and the Governor for passing this bill, which he points to as a model that other states will be smart to adopt. 

“This is one of the most significant broad-based innovation freedom developments in Tennessee, which becomes one of the first states to pass such a law in the country,” Owen writes of SB 872. “Preempting local governments from imposing a hodgepodge of local regulations on online marketplaces will allow innovation to flourish. It could also make Tennessee a magnet for the next big innovation and all the jobs that could follow.”

Photo Credit: Tim Stewart

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Truth-in-Taxation Bill Moving Through Nebraska Legislature

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Posted by John Neher on Monday, April 26th, 2021, 2:40 PM PERMALINK

A Nebraska lawmaker is aiming to better inform taxpayers about potential tax increases that have historically been approved without warning to constituents. State Sen. Ben Hansen recently introduced LB644, a proposal that requires that local boards directly notify every taxpayer about public hearings discussing any proposal to increase property taxes. This legislation will create a further commitment to sound tax policy and offer more clarity to the taxpayers of the Cornhusker State.

Sen. Hansen models his initiative behind Utah, who was the first to pass ‘Truth-in-Taxation. When Truth-in-Taxation passed in 1985, Utah ranked 24th in the nation in property taxes per $1,000 of personal income. Utah now ranks 36th. Nebraska ranks 12th in property taxes per capita. Nebraska's effective property tax rate is higher than in most states, and partially as a result, property taxes account for 38.2% of the overall state and local tax revenue, well above the 31.9% national average. Sen. Hansen also says his bill would increase transparency and give elected officials pause before raising taxes. Illinois, Texas, Minnesota, and Arizona have also implemented versions of this law.

The State of Nebraska currently requires local governments to hold public hearings before property taxes are to be increased due to a rise in property valuations. A previous bill, LB103 which was passed by lawmakers in 2019, required these public hearings to be posted in the newspaper at least five days before the hearing. These notices have widely gone unnoticed by the public which all too often resulted in government boards increasing taxes with little input from taxpayers. The Platte Institute of Nebraska recently conducted a poll of Nebraskans about this matter and found that almost 40% were not aware that public hearings were to be held before an increase in property levies. The same poll found that 77% support being directly notified via mail of such public hearings. The results of the poll show that more members of the public would like to be included in the local process and voice their own thoughts about property tax initiatives. 

Sen. Hansen’s bill aims to directly bolster the power of LB103 and provides a real ‘Truth-in-Taxation’ law by directly notifying the public. LB644 will require that a postcard be sent out via mail directly to constituents and notify them about public hearings and board votes for local property tax increases. The Platte Institute of Nebraska, who is a major proponent of this bill, states, “With a proposed committee amendment, LB644 would provide taxpayers with a stronger voice in how local property taxes are decided by providing the date, time, and location of a joint public meeting where proposed property tax increases from counties, cities, school districts, and community colleges will be decided. Each resident would be provided at least three minutes for public comment at the hearing. Subdivisions must explain how much a property taxpayer’s tax bill would rise if the proposed tax increase were approved, and hold the joint public hearing after 6 p.m. on a date between August 20 and before September 20, allowing more taxpayers the opportunity to attend these public meetings.”

 

If you would like to read the Platte Institute’s full testimony in support of this bill, click here. 

Photo Credit: Manoj Kumar

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Despite Biden Bailout, New York Dems Want Almost $7 Billion in New Taxes

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Posted by John Neher on Monday, March 22nd, 2021, 4:06 PM PERMALINK

In the Empire State, both the Assembly and Senate have introduced budgets that would impose nearly $7 billion in new taxes on businesses and individuals. Legislative leaders continue to push tax hikes even after The American Rescue Plan, and its blue state bailout, will send $100 billion in federal aid to the state of New York.

After the bill is signed into law, experts stress that tax hikes will no longer be needed. “The ARP, together with higher than expected income tax revenues, definitely closes the state and city budget gaps and makes tax increases this year or next unnecessary,” said Kathryn Wylde, CEO of the New York City Partnership to the New York Post. Even the office of Senator Chuck Schumer (D-NY) said earlier this month that federal pandemic relief would solve New York’s deficit and eliminate the need for new taxes. 

Tax hikes will make New York more unaffordable, and keep the exodus of high earners and business owners flowing out of the state. Hiking taxes during the pandemic, while the state is flush with bailout money, shows New Yorkers that Albany lawmakers will put their big spending priorities before jobs, families, and taxpayers in any circumstance.  It’s also a reminder to the out of state taxpayers footing the bill for New York’s negligence that the state will keep digging holes and demanding handouts well into the future.

The proposed new taxes include:

  • A graduated tax hike on millionaires. The current income tax rate for single filers making more than $1 million and couples earning more than $2 million is 8.82 percent. That rate would rise to 11.85 percent.
  • There also would be two new brackets: one for taxpayers earning between $5 million and $25 million and another for those making more than $25 million. The former would be taxed at a 10.85 percent rate, while the later would be slammed with 11.85 percent.
  • A new capital gains tax of 1 percent on those earning more than $1 million a year, boosting state coffers by about $700 million.
  • A new progressive state tax on those with pied-a-terre’s, mansion town homes — or anything in between — used as a second home in New York City. The new levy would raise a projected $300 million for the state.
  • An estate tax boost from 16 percent to 20 percent, raking in another $130 million.
  • A new 18 percent “surcharge” on corporate franchises, utilities and insurance companies — which could mean higher bills for customers. That tax would generate $1 billion, the lawmakers said.
  • The reinstatement of a minimum business tax on corporate capital, earning another $150 million for the state.
  • A recording tax on “mezzanine debt and preferred equity investments,’’ which would add another $171 million to state coffers.

 

“These proposals would raise New York’s top state income tax rate to its highest statutory levels since 1979, when it was 12 percent,’’ said EJ McMahon, fiscal analyst at the watchdog Empire Center for Public Policy. At a time when New York desperately needs to retain investment for a healthy recovery, the approach by Democrats to tax everything from Wall Street to small businesses seems quite foolish. 

Photo Credit: J Whitebread

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Opportunity for Florida to Curb Ineffective, Inappropriate Driver’s License Suspensions

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Posted by John Neher on Thursday, March 11th, 2021, 11:23 PM PERMALINK

A pair of Florida lawmakers are aiming to end a counterproductive and inefficient way to collect fines and fees: driver’s license suspension.

In Florida, a person’s driver’s license can be suspended as punishment for unpaid court debt. This practice has drawn criticism from both parties as an irresponsible way to collect fines and a cyclical disaster for low-income offenders that is unrelated to road safety.

State Senator Tom Wright and Rep. Chip LaMarca have introduced HB 557 and Senate Bill 386 which would end the suspension of driver’s licenses if the underlying reason for an unpaid fine or fee in a criminal case.

Read ATR's letter of support for HB 557/SB 386.

License suspension for a criminal traffic offense is a warranted, common sense punishment. To suspend a person’s driver’s license where their debt resulted from something unrelated to driving doesn’t line up, and serves to make that debt much more difficult to pay.

“If you’re taking away someone’s ability to drive and ability to work, how are they going to earn the money that they need to earn in order to pay off the amount that they owe?” asks Ashley Thomas, the Florida state director of the Fines and Fees Justice Center. “These are folks who are reentering society after having served their sentence. They have criminal convictions. They’re already facing an uphill battle finding a job or finding an employer, and there’s a lot of jobs in Florida that require driving, so we’re basically just making it impossible for folks to be able to work.”

Results from California, one of the early states to reform driver’s license suspension, show that courts are now receiving more money because people are better able to pay their fines if they can drive to work. California’s courts reported a 9% increase in collections on newly issued traffic tickets following reform.

Illinois lawmakers passed legislation in January to end the policy of suspending driver’s licenses for unpaid “red-light and speed camera tickets.” There are now 14 states that have started to curb debt-related driver’s license suspensions.

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Kansas Criminal Justice Task Force Recommendations Would Mean More Jobs, Less Crime

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Posted by John Neher on Tuesday, March 9th, 2021, 3:50 PM PERMALINK

Recommendations for improving Kansas’ criminal justice system are here, and legislation is on the table this session to get them done. 

After much time and effort, the Kansas Criminal Justice Reform Commission recently released their report to the 2021 Kansas Legislature, featuring numerous recommendations and legislative endorsements to fix issues faced by The Sunflower State. 

While the COVID-19 pandemic caused consternation for the state budget, Kansas will likely now get over $1 billion from the Biden bailout bill. 

Kansas Representative Stephen Owens touted the commission’s recommendations saying, “We must act now by making strategic improvements for a better path forward. Dedicated practitioners on the Kansas Criminal Justice Reform Commission have recommended a package of criminal justice bills which my colleagues in the legislature should pass this session.” 

In an article published by the Wichita Eagle, Rep. Owens makes that case that the flaws in the criminal justice system are costing the taxpayers in Kansas a great deal, without delivering the public safety results they should expect. 

These issues include counterproductive sentencing, punishing addiction without treating it, and regulations that prevent people from getting back into the workforce. All of these could be addressed by the recommended legislation highlighted in the commission report. Enacting these smart reforms that put public safety first, while making the system more efficient, would greatly improve Kansas’s criminal justice system.  

The proposals aim to address growing prison populations that are projected to grow 14 percent by 2029, which would cost taxpayers an additional $209 million over that period. Factors that contribute to that growth include increased incarceration rates for drug offenses. 

These offenses can be dealt with more effectively through treatment instead of only paying more for the problem through larger prison budgets. Formerly incarcerated people are often in need of additional treatment and assistance. It is estimated that 75 percent of people leaving Kansas prisons need substance abuse assistance. Given the connection between addiction and re-offense, it only makes sense to address addiction first, along with any other penalties.

Also, there are over 400 regulations in place that keep recently incarcerated citizens out of employment. Where relevant to public safety, restrictions are commonsense and well-founded, but where public safety is not a valid reason for blocking people from jobs, public safety is actually put at risk. Having a job is an important step to reintegrating with society, and helps prevent recidivism.   

The Justice Center for The Council of State Governments also provides a good outline of the recommended legislation that Kansas lawmakers should enact this session. They include diverting more people charged with drug offenses to treatment or supervision, improve supervision by focusing resources, where they can be most effective, and expand access to reentry and employment support. 

 

A list of corresponding legislation can be found here. If you would like to read the full report by the Kansas Criminal Justice Reform Commission, it can be found here

Photo Credit: Stanley

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Wisconsin’s Democratic Governor Proposes $1 Billion in State Tax Hikes

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Posted by John Neher on Monday, February 22nd, 2021, 10:38 AM PERMALINK

Wisconsin Gov. Tony Evers (D) introduced his $91 billion state budget this week, a largely political document that would increase state spending by more than 9% this year, and impose about $1 billion in numerous tax increases. Right before Evers was elected in 2018, he claimed he would raise no taxes. 

Evers’ budget proposal raises taxes in the following ways: 

— Limits the amount that manufacturers can claim for an existing tax credit to $300,000 a year. That will raise taxes by about $485 million over the next two years. 

— Eliminates the 30% percent long-term capital gains exclusion for single filers earning more than $400,000 and joint filers earning more than $533,000. This move will increase taxes by about $350 million.

Raises taxes roughly $540 million by conforming to the base broadening and revenue-generating provisions of the 2017 Tax Cuts & Jobs Act (TCJA). Such conformity with the TCJA would raise state taxes by $548 million dollars over the next two years. 

Gov. Evers is also proposing a half-cent local sales increase that, along with the other tax hikes included in his budget, has been met with strong opposition from the Badger State’s business community. 

“Hard-working Wisconsin families and small businesses have had to make tough decisions about their own budgets this past year,” Scott Manley, executive vice president for Wisconsin Manufacturers & Commerce, said of Gov. Evers’ budget proposal. “Instead of having similar discussions about how to make government more efficient, this plan just takes more money from taxpayers at a time when they can least afford it.” 

A Wisconsin Policy Forum report forecasted in December that the state could possibly be facing the largest budget shortfall since 2011. Governor Scott Walker and Wisconsin legislators closed that 2011 shortfall with no tax hikes thanks to the help of Act 10, the landmark entitlement reform, key parts of which Governor Evers is proposing to repeal as part of his new budget that will serve as a door stopper for Republican legislators. The state will have roughly $2 billion in reserves by June 30th, and that is before the billions of additional federal cash that the new Democratic-run Congress is getting ready to send to Madison. Aside from the harm Governor Evers’ proposed tax hikes would do to individuals, families, and employers across Wisconsin, the fact is that they’re simply not needed.

Photo Credit: Phil Roeder

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MN Gov. Tim Walz Proposes Slate of Tax & Fee Hikes

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Posted by John Neher on Tuesday, February 2nd, 2021, 3:37 PM PERMALINK

Minnesota Governor Tim Walz introduced his budget proposal last week, a plan that is dominated by big tax hikes. 

Walz leads his tax grab with a so-called millionaire’s tax that will in fact hit people making far less than $1 million annually. Walz seems to think the government gave successful people their earnings, saying, "This is about a progressive taxation system that says, much is required of much given to some folks."

Walz wants higher taxes for many reasons, including giving teachers’ unions more money. Also standing out amongst a mess of bad tax policy is a tax hike on life-saving e-cigarettes.

 

The proposed tax increases for Minnesota include:

-An increased income tax rate for household incomes above $1 million

-An increase in the corporate tax rate for large companies, specifically companies who recorded a profit during the pandemic

-Imposing an additional capital gains tax that includes a 4% tax on gains over $1 million for individuals, trusts, and estates

-Taxing foreign income that returns to the U.S. 

-Revising the estate tax for individuals, not for small businesses or farms

-$139 million increase in tobacco taxes on both vaping and cigarettes

 

Fee increases include:

-Increased fees on new car license plates

-Higher state park fees, specifically state park passes

-Higher boat registration fees 

-Increased licensing fees for industries such as insurance, pesticide fees, and newborn  screening fees

 

Republican lawmakers and Minnesota businesses voiced opposition while Democrats, teachers, and labor unions praised the budget's proposed provisions. Minnesota Chamber of Commerce President Doug Loon said of the budget proposal, "While some of the governor's recommended investments have merit, the tax increases required to support this degree of ongoing spending will knock Minnesota out of competitive rankings and threaten our economic recovery."

GOP leaders stated that they would not approve a plan that included tax increases and that the state should cut state various agency budgets and dip into budget reserves instead of raising taxes.

"Proposing tax hikes is shockingly tone-deaf after Minnesota families and businesses have endured nearly a year of the governor's shutdowns and constantly-changing executive orders," House Minority Leader Kurt Daudt, R-Zimmerman, said in a news release. "The governor knows they have no chance of becoming law. We are ready to roll up our sleeves to pass a bipartisan budget that funds our priorities while asking the government to tighten its belt to close the budget deficit without tax increases."

Although the COVID-19 pandemic has posed significant challenges for state governments. It is not in the interest of anyone to impose new taxes and fees. States will prolong their economic recovery if their only course of action is to raise taxes despite the unsteady financial health of their small businesses, families, and students. 

Photo Credit: Joe Lencioni

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