Katie McAuliffe

Good Fences Make Good Neighbors: The Digital Goods and Services Fairness Act, H.R. 1643

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Posted by Katie McAuliffe on Tuesday, September 13th, 2016, 2:26 PM PERMALINK

Americans for Tax Reform today sent an open letter to Congressmen Lamar Smith (R-Tex.), Steve Chabot (R-Ohio), Steve Cohen (D-Tenn.), and Trent Franks (R-Ariz.) praising their support for the Digital Goods and Services Tax Fairness Act (HR 1643) and urged all other members of Congress to do the same.

The full letter can be seen below, and here:


September 13, 2016

Dear Congressmen:


On behalf of American taxpayers, I write to thank you for your support of the Digital Goods and Services Tax Fairness Act (HR 1643), and urge you to continue your steadfast advocacy for this measure. 

This legislation prevents double taxation and holds policy makers accountable for enacting new taxes by establishing digital tax borders across the fifty states. Given the interstate nature of ecommerce, it is important for Congress to clarify taxing authority.

Without a framework of digital borders for digital goods and services, the door remains open for a single consumer purchase to be taxed in multiple states. 

For example, a consumer based in Nebraska could purchase a digital good from a California company located on a server in Wyoming and could be subject to taxes from three separate jurisdictions for one purchase, if HR 1643 is not passed into law. 

Taxation of intangible goods is without precedent. As a result, a patchwork of varying laws for taxing digital goods, streaming services and apps have developed by administrative fiat rather than a vote from elected officials.  

Numerous states have expanded the definition of a good or service through the various departments of revenue or other administrative bodies, bypassing the elected state legislators altogether. There must be a mechanism in place to hold these policymakers accountable to their constituents. 

HR 1643 passed out of the House Committee on the Judiciary by voice vote.  We look forward to seeing this bill pass on the House floor.

If you should have any questions regarding this issue please contact me, or Katie McAuliffe at kmcauliffe@atr.org or 202-785-0266.



Grover G. Norquist

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The Administration's Assault on Article 1

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Posted by Katie McAuliffe on Friday, August 12th, 2016, 9:35 AM PERMALINK

Whether Democrat, Republican, or Independent, as an American, you likely care about the separation of powers between the executive, legislative and judicial branches. 

The Department of Commerce, via the National Telecommunications and Information Administration (NTIA), is directly violating a law that forbids it from using funds to transfer the Internet Domain Name contract away from United States oversight.  

Congress should not enable an administration that picks and chooses which laws to follow. It should sue to enforce its Power of the Purse and reaffirm our system of checks and balances.

Americans for Tax Reform signed on to a coalition letter urging the United States Congress to do just that. 

The following can be attributed to Americans for Tax Reform President, Grover Norquist: 

“Congress has already won in court on the Obama Administration’s ‘inappropriate’ spending of funds to pay for the Affordable Care Act.  Congress did not appropriate the cost-sharing provisions and the Administration went ahead and spent the money - that was found to be a violation of the U.S. Constitution. 

“Suing to enforce the appropriations rider, preventing the NTIA from spending funds towards the IANA transition and extending that rider through 2017, is important.  It is a key battle in the fight to protect constitutionally separated powers. 

“Both parties should have a real interest in protecting the Congressional Power of the Purse.  If legislation is no longer binding, Congress forfeits a basic check on Executive power.”

This administration is setting the precedent for all future presidencies.  The executive had bent, indeed broken, the rules and ignore Congressional protests.  The NTIA's action is another example. 

In order to allow some pre-existing issues to be settled, Congress forbade the NTIA from using congressionally appropriated funds to go towards the transition. However, in 2016, the NTIA released a report indicating they were looking into, and dedicating resources to the transition. This is in violation of federal law prohibiting the NTIA from using funds in the years 2015 and 2016 to further the transition of the IANA contract.

Regardless of the numerous concerns surrounding IANA stewardship and the security issues with the transition, the NTIA’s action presents a threat to our democracy. The executive is ignoring a congressional appropriation. This is a signal of disrespect to the Constitution and separation of powers.

Lawmakers should unite behind suing to enforce the power of the purse, it’s most basic constitutionally enumerated check. Otherwise, legislation in Congress will be viewed as non-binding and the legislative branch’s power to check the executive will be greatly diminished. 

The full text of the coalition letter can be found here.

Photo Credit: Kim Davies

Financial Services Appropriations Bill Reins in Obama Government Agencies

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Posted by Alexander Hendrie, Justin Sykes, Katie McAuliffe on Tuesday, June 21st, 2016, 1:10 PM PERMALINK

Later this week, the U.S. House of Representatives will vote on H.R. 5485, the Financial Services and General Government (FSGG) Appropriations Act, introduced by Congressman Ander Crenshaw (R-Fla.). This legislation allocates 2017 federal funding for numerous agencies including the Treasury Department, the IRS, the Securities and Exchange Commission and the FCC.

H.R. 5485 allocates this funding in a responsible, pro-taxpayer way and reins in out-of-control agencies to ensure they do not overstep their bounds and needlessly waste federal resources. ATR supports this legislation and urges all Members of Congress to vote for it when it reaches the floor.

Restrains IRS Overreach
H.R. 5485 contains several important policy riders to rein in the IRS. Under this administration, the agency has targeted non-profit organizations, families, and small businesses again and again in a concerted effort to limit free speech and harass taxpayers.

The legislation prohibits the IRS from implementing a new regulation on non-profit organizations, from giving bonuses or rehiring former employees without proper tax compliance measures, or from targeting individuals based on first amendment rights. In addition, the package implements extensive reporting on IRS spending to ensure the agency is wisely utilizing taxpayer resources.

Reins in SEC Funding and Improves Transparency
FSGG allocates $1.5 billion for the SEC, lowering the agency’s funding by $50 million from previous levels in fiscal year 2016. The legislation also creates new reporting requirements for the SEC, which would improve the transparency and fairness of the agency. One provision requires the SEC to report to Congress the cost associated with the regulatory burdens promulgated under the Dodd-Frank Act. 

The legislation also ensures First Amendment free speech is protected by prohibiting the agency from requiring the disclosure of political contributions in SEC filings. 

Responsibly Allocates IRS Funding 
The legislation provides $10.9 billion for the IRS, reducing their funding by $236 million compared to fiscal year 2016. In addition, the legislation funds the agency $1.3 billion below President Obama’s budget, which called for more than $1 billion in additional funding for the agency.

FSGG also allocates this funding in an efficient way. Of the $10.9 billion in funding, the legislation allocates $2.1 billion to taxpayer services and provides $290 million for the IRS to improve customer service, fight fraud, and improve cybersecurity.

Given the IRS's record of ineptitude and incompetence, the last thing the agency needs is more money. The agency’s woes are due to its management problems, not because of insufficient resources and this legislation will force the agency to spend its resources in a more responsible way.

Blocks Implementation of Obamacare
FSGG also contains important provisions that restrict the ability of the federal government to implement Obamacare. Specifically, this legislation stops transfer of funds between the Department of Health and Human Services and the IRS to fund Obamacare. Since passage of the law, the Obama Administration has funneled funds across agencies to hide the true costs of the law and pay out special interests at the expense of the American people.

Most importantly, the legislation restricts the use of funds to implement the individual mandate. Under current law, anyone not buying “qualifying” health insurance – as defined by President Obama’s Department of Health and Human Services -- must pay an income surtax to the IRS. This year a family in the middle class will be forced to pay 2.5 percent of Adjusted Gross income or $1,390 if they do not have insurance. The Obama administration uses the Orwellian phrase “shared responsibility payment” to describe this tax.  

Increases CFPB Oversight and Accountability 
This legislation provides increased oversight over the Consumer Financial Protection Bureau, by subjecting the agency to annual congressional appropriations process, something that has not occurred since the CFPB was created in 2010. By bringing funding for the CFPB under the congressional appropriations process, this legislation increases the accountability of the CFPB to congress and taxpayers. 

Further, H.R. 5485 temporarily halts the CFPB’s costly and overreaching arbitration rule by requiring the agency to study the use of pre-dispute arbitration before issuing such regulations. The CFPB has not adequately justified the need for rule, and enactment would increase the costs of products and reduce access for the very consumers it would supposedly protect.  

Restrains FCC
The FCC’s snowballing regulatory binge continues to tighten its grasp on basic functions of the Internet and the free market.  The FCC's dubious interpretations of "ambiguous" legal language, even at the protest of Congress, leave no other options but for Congress to restrain and direct FCC spending as Congress is statutorily required to do.

To enhance transparency and public participation, funds must be used for the agency to make all proposed regulations public three weeks before the final legally binding vote.  It constrains some of the agency’s overreaches on policy, by preventing the agency from using any appropriated funding for “Net Neutrality” regulations until court proceedings conclude. 

The dollars in the public pot are limited. While the agency does receive less money for operations than it asked for, and the is an overall decrease in funding of $25 million, the FCC maintains an ample budget of $315 million to aptly pursue its core functions and target waste fraud and abuse within its programs. 


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ATR Response to Net Neutrality Ruling

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Posted by Katie McAuliffe on Wednesday, June 15th, 2016, 1:08 PM PERMALINK

The DC Circuit Court’s 2-1 decision in favor of the FCC’s Internet regulations represent a significant blow to the integrity of the Internet. The decision fails to address any meaningful issue and will serve to stifle innovation and investment in the future.

This decision also allows the FCC and the rest of the government to continue to overstep its authority and threaten the sovereignty of the private sector. 

Grover Norquist, the President of Americans for Tax Reform said:

“Treating the internet as a 19th century utility means putting it under political control, driven by backward looking bureaucrats. Such treatment will kill innovation, delay the future and abort thousands of new entrepreneurial efforts. This court decision must not stand.”

The spirit of the FCC’s regulations was to prevent Internet Service Providers (ISPs) from censoring free speech by charging different prices for different content. However, the dissent by Judge Williams makes clear that, while these rules were intended to promote growth, they will, more likely, slow innovation and investment.

The FCC’s regulations not only impose unnecessary burdens on existing ISPs by dictating their private pricing practices, it will undeniably deny smaller ISPs from being able to gain access to a greater share of the market. This will have the counterproductive effect of severely limiting competition.

As Judge Williams addressed in his eloquent dissent, the FCC’s regulations will put Internet on a trend towards incurable monopolies. Despite being created to prevent these sorts of economic conditions, the regulations will actually make them a reality. This is the “ultimate irony” of these rules.

Despite this obvious setback, we will continue to participate in the steps ahead to ensure that the Internet is able to return to a free-market approach that has fueled its thriving success. We also plan on being a voice in the coming discussion on how to ensure the Internet best serves the American people. We are optimistic that the value of the free market will shine through in this fight.

Photo Credit: Greg Elin

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Norquist Statement on Protecting Internet Freedom Act

Posted by Katie McAuliffe on Wednesday, June 8th, 2016, 10:16 AM PERMALINK

The following can be attributed to Grover Norquist, President of Americans for Tax Reform, regarding the United States' oversight role for Internet domain names:

“The power of the Internet should be free, open, and available for all Americans and all the people of the world.  It should not be taxed, over-regulated, policed and/or spied on by Washington bureaucrats or bureaucrats overseas.

“The Cruz-Duffy legislation raises important questions as to how we best protect the Internet which has delivered great progress, and promises more, both politically and economically.” 

This is a response to a proposed plan to transition the oversight of Internet domain names to a global multi-stakeholder community. The loosely designed plan has prompted many fears that authoritarian regimes will influence and undermine the goal of making the Internet more accessible to people around the globe.

Senator Ted Cruz (Texas) and Congressman Sean Duffy (Wis.) introduced companion legislation in both Chambers, entitled the Protecting Internet Freedom Act, which would ensure no such transition can take place without Congressional approval. 

As it currently stands, the US hands off oversight to the Internet Corporation for Assigned Names and Numbers (ICANN), a non-profit based in California, which is meant to help facilitate the coming transition. The Commerce Department will review a full plan for the transition this month.

However, many lawmakers on the Hill, like Cruz, and Senators James Lankford (Okla.), Mike Lee (Utah), and Marco Rubio (Fla.) are not satisfied. Cruz has championed this bill as the “last chance to save Internet freedom.”

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Norquist Applauds the Continuing App Evolution

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Posted by Katie McAuliffe on Wednesday, April 20th, 2016, 2:18 PM PERMALINK

Today, Comcast announced the launch of its new ap that can replace the need for a cable box.  The app is currently available on Roku and Samsung Internet TVs, and is available to manufacturers and developers building any number of devices to show content on a television screen.  

The Federal Communications Commission is currently proposing rules that would require cable companies maintain the cable box, even if it could be replaced by an app. 

The following statement can be attributed to Grover Norquist, President of Americans for Tax Reform:

"The FCC is trying to mandate old and outdated technology. Comcast has solved the problem that the FCC has decided to continue."  

Once again free market forces move faster than government.  The Federal Communications Commission is just now proposing rules that would require cable companies maintain the clunky cable box.  

This new development should clear some space on the FCC's calendar.  Now they can go back to working on getting more spectrum to the market for all of our tech devices.  That would be a real net benefit for consumers, and actually within the FCC"s job description.



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President Obama Agrees to Stop Internet Taxes

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Posted by Katie McAuliffe on Thursday, February 25th, 2016, 4:52 PM PERMALINK

The Internet Tax ban has always been widely supported, but because of its popularity for 18 years it could not escape other ball and chain initiatives.  Now it is Free!

Four major bipartisan trade bills have been signed into law this Congress under the leadership of Senator Hatch (R-Utah).  These bills help American job creators and workers compete in the global market.

There are more reasons than efficient trade enforcement and facilitation in this Act to celebrate.

Senator Hatch, along with allies Senator Ron Wyden, Chairman Kevin Brady, and Chairman Bob Goodlatee, included a permanent ban on Internet access taxes in the Trade legislation.

The Internet Access Tax was a threat that Congress held over the heads of the American people for 18 years.  The ban on these taxes was periodically extended, but without permanency it was always a bargaining chip that tax & spenders wouldn’t take off the table.  That threat is gone.

On Wednesday February 24th, President Obama signed the fourth of this suit of bills into law, the Trade Facilitation and Trade Enforcement Act, with Senator Hatch at his side.

Americans can thank a bipartisan effort in both the Senate and the House to pass trade legislation and the Permanent Internet Tax Freedom Act.

Americans, can also thank President Obama for signing this legislation into law.

Like the permanent extension of the Bush tax cuts, the Permanent Internet Access Tax Ban is a win to celebrate.

In a time when it seems as though the partisan gridlock seems impossible to break, and American taxpayers see there taxes rising, we need to remember these victories.

These victories are not small.  These are battles we never have to fight again.

Photo Credit: finance.senate.gov

New Jersey State Senator Proposes Bill to Infringe on Ability to Buy Pets

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Posted by Katie McAuliffe on Tuesday, February 2nd, 2016, 1:42 PM PERMALINK

Senator Lesniak of the New Jersey State Senate recently introduced NJ SB. 63, which infringes on the right to conduct business via the Internet.  This bill specifically attempts to regulate an already regulated industry, animal breeding.  It is now a common practice to purchase a puppy of a specific breed or cross breeds online from a private breeder. 

The senator uses the rallying cry of animal abuse to shield the true nature of the bill, more intrusion and regulation of the internet on the part of the government.  Animal abuse should be taken seriously.  Americans level of awareness of “puppy mills” or other unsavory breeding methods for any pet has raised dramatically over the decades.  It is my belief that no one in search of that special pet wants their best friend or its relatives to have been abused in any way.

This problem of abuse and added regulation has already been addressed by Animal Plant Health Inspection Service through USDA in 2013.  The rule established that these “unseen sellers” must be federally licensed, thus allowing inspection by federal authorities.  The rule also encourages buyers to report inhumane conditions and sickness stemming from breeding mismanagement.  To put it simply, the New Jersey bill is there only to force regulation down the throats of small business owners while increasing government control. 

The bill, read to the letter, seems to completely ignore the need for service and emotional support dogs, which are often done via the Internet sometimes through unseen sellers.  Many people with mental and physical disorders, ranging from a child with autism to a veteran to PTSD, use service dogs to better their quality of life.  This bill has the potential to hurt those in need by limiting their access to available animals.  

Photo Credit: Jonathan Kriz

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ATR Letter: Keep ITFFA in Customs Bill

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Posted by Katie McAuliffe on Friday, January 15th, 2016, 2:56 PM PERMALINK

ATR this week released the following letter supporting the inclusion of the Internet Tax Freedom Forever Act (ITFFA) in the Trade Facilitation and Trade Enforcement Act of 2015. The letter can be found here, and is pasted below:

January 12, 2016

Dear Senators,

Making the ban on Internet Access Taxes Permanent is a tremendous victory for all taxpayers.  Thank you for including the Internet Tax Freedom Forever Act (ITFFA) in the Trade Facilitation and Trade Enforcement Act of 2015.

To stop Harry Reid’s war on taxpayers, I urge you to vote for cloture, against point of order, and for the “customs” bill as a whole with ITFFA included.

It does not follow that online sales tax must be tied to ITFA wherever it goes.  The argument that all states need a new revenue offset, does not apply.  Only seven states currently have access taxes.  Hawaii, New Mexico, North Dakota, Ohio, South Dakota, Texas and Wisconsin are exempt from the current ban.

The Center on Budget and Policy Priorities estimates eliminating these taxes would amount to $561 million in aggregate savings to those taxpayers, Texas makes up $358 million for the $561 total. From the grandfathered states Senate Commerce Committee Chairman John Thune (R-S.D.), Sens. Ted Cruz (R-Texas), Rob Portman (R-Ohio) and Ron Johnson (R-Wis.) are sponsors of the legislation.

In terms of original intent, the Act was not necessarily based on the nascence of the Internet industry. It was based on the fact that the Internet is intrinsically multijurisdictional, thereby uniquely situated for multiple and discriminatory taxation. 

The grandfathered states were intended to phase out their access taxes.  However the grandfathering continued through subsequent reauthorizations giving the seven taxing states more time to phase out their taxes.  States have not phased out the taxes on their own.  There was never an intention to grandfather states in.

ITFFA does not exempt sales made on the Internet from taxation.  Taxes for e-commerce must simply be taxed at the same state and local sales tax rate as non-Internet sales.

If online sales tax were to be considered as part of a package, it is more naturally aligned with Digital Goods Fairness, Mobile Workforce and Business Activity Tax Simplification.  These are all tax nexus bills.

If you should have any questions or thoughts, please contact me, or Katie McAuliffe, Federal Affairs Manager, by phone, 202-785-0266, or by email, kmcauliffe@atr.org.


Grover Norquist 
Americans for Tax Reform             

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Excessive Regulation Costs US Economy $2 Trillion Dollars

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Posted by Katie McAuliffe on Tuesday, January 5th, 2016, 4:08 PM PERMALINK

Agencies continually enact new regulations without eliminating unneeded, obsolete and conflicting regulations. These regulations weigh down the US economy with a $2 Trillion price tag.

On Wednesday the House will consider the SCRUB Act, (H.R. 1155, “Searching for and Cutting Regulations that are Unnecessarily Burdensome Act of 2015).  Americans for Tax Reform supports this legislation, which creates a BRAC-style commission tasked with ferreting-out obsolete or excessive rules for amendment or elimination.

Many regulations are too difficult to interpret, requiring businesses and individuals to enlist professional help.  On Friday the House will consider the Providing Accountability Through Transparency Act of 2015, H.R. 690.  Americans for Tax Reform supports this legislation as well. It requires agencies post an easily accessible 100-word plain language summary of any new regulation online.

Together The SCRUB Act and the Providing Accountability Through Transparency Act will help streamline and modernize our federal regulatory system.

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