Miriam Roff

Indiana Republican House Speaker Bosma Pushing for Gas Tax Hike Again

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Posted by Miriam Roff on Monday, January 9th, 2017, 3:12 PM PERMALINK


New Year, New Me? Not if you’re Indiana House Speaker Brian Bosma (R-88). For the second year in a row, the Speaker is pushing a hike in the state’s gas tax.

House Republicans unveiled a series of tax hikes last Wednesday in an effort to raise about $800 million in new funds for the state’s transportation infrastructure over the next two years. The plan would not only slap Indiana taxpayers with a 10 cents per gallon gas tax hike but it would also index the tax to inflation, and increase the special fuel and motor carrier surcharge tax.

From the new revenue generated, the state would allocate roughly $300 million in new dollars to state roads in fiscal year 2018 and between $480 million and $540 million the following year. The proposal would also redirect the remaining 4.5 cents of the sales tax on gasoline that is currently diverted to the general fund to the state highway fund, starting in 2019.

The proposal also imposes a new annual $15 fee on every vehicle registered in the state and a $150 per-year fee on electric vehicles. These taxes are projected to generate $92 million per year and would be allocated to local roads.

As detailed above, the proposed solutions to the state’s transportation needs are only focused on raising taxes and not reforming government or reallocating currently collected resources. By allowing the gas tax rate to increase automatically every year, lawmakers are placing tax hikes on autopilot and are stripping from the budget process the responsibility and accountability that come with annual decisions about tax rates.

Second, gas tax revenue will continue to be diverted to the state’s general fund until 2019. If transportation funding were truly a priority, lawmakers would immediately use gas tax revenue for its intended purpose: roads. Legislators would also permanently codify the earmarking of gas tax revenue to new and existing transportation projects.

Third, the gas tax is not a user fee. Consumers must be presented with a choice of either purchasing the service from the government (by paying the fee) or purchasing the services from a private business in order to qualify as a true user fee. Because anyone who purchases gasoline in Indiana is forced to pay the tax, they are not considered user fees. Gas tax increases are tax increases in the same way that income and sales tax increases are. Road tolls, however, are an example of user fees. Tolls are user fees because commuters have the option of using the roads they are imposed upon or not.  

Now that hardworking Hoosier families can finally afford to fuel their cars and heat their homes, legislators should not strip them of economic opportunity by making gas increasingly unaffordable. Reasonably and low-priced gasoline allows people to spend more money on groceries and other necessities, including long-term investment savings. Americans for Tax Reform will closely monitor this issue as it develops in the coming weeks and working to educate taxpayers of where their legislator stands on tax hikes and government reform.

 

 

Photo Credit: 
Dan Goldblatt/WFIU

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While Neighboring States are Cutting Taxes, Louisiana Set to Pass 2nd Round of Tax Hikes this Year

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Posted by Miriam Roff on Saturday, June 18th, 2016, 1:00 PM PERMALINK


The Louisiana legislature is in the midst of a special session called by Governor John Bel Edwards (D- La.)  to address a projected $600 million shortfall for the next fiscal year, which begins at the end of the month. Just three months after he signed into law a $1.2 billion tax hike, Gov. Edwards is looking for more hard-earned income from Pelican State taxpayers and plans to hold funding for education programs and health care programs hostage unless his demands for further tax hikes are met.

As lawmakers in Louisiana are laying on the tax increases, lawmakers in neighboring states—Texas, Tennessee, Florida, North Carolina, Mississippi, and Arkansas—have moved in the opposite direction by enacting major tax reform packages over the last few years.

The question is not whether the Louisiana legislature will pass a second round of tax hikes this year, but by how much and which taxes they will raise. Senate President John Alario thinks the state needs an additional $450 in revenue, whereas the house so far has only agreed to raise taxes by $222 million.

Yet, one thing is clear this special session: Louisiana lawmakers are going to expand the scope and size of government and make it even harder for Louisiana to compete with neighboring states for employers and new residents. The following bills approved by the senate yesterdayHouse Bill 38, House Bill 35, Senate Bill 6, and Senate Bill 10— have set this stage.

Tennessee and Mississippi are the latest of the southern states to jump on the rate reducing income tax cut bandwagon. This legislative session Tennessee became a true no-income tax state by fully phasing out its Hall Tax and Mississippi set the stage for fully phasing out its Franchise-Tax over the next decade.  According to the non-partisan Tax Foundation, by eliminating the Hall Tax, Tennessee propelled itself forward from being 15th best in the nation for business tax climate to 11th best.

North Carolina lawmakers also understand the importance of good, efficient tax policy. Legislators reduced income taxes in 2013 and 2015, which improved their business tax climate ranking from 44th worst in the nation to 16th best and are not going to stop. This session they plan to pass further tax relief.

Even Arkansas recognizes the importance of smart tax policy, as last year they enacted income tax relief.

And lastly, it should come as no surprise that Texas and Florida vie for being number one in job creation, as Gov. Rick Scott (R- Fla.) has publicly stated that he wants to beat the Lone Star State in job growth. Who could blame him? Both states house some of the best business tax climates in the nation.  According to the non-partisan Tax Foundation, in 2016 Texas had the 10th best business tax climate in the nation and Florida had the 4th best. Furthermore both states do not rest on their laurels and continue to look for ways to improve their tax code. Just last year, Texas Gov. Greg Abbott (R) enacted further rate reducing tax reform by passing $4 billion in tax cuts on businesses and property owners. Last year Florida Gov. Rick Scott (R) also passed $428.9 million in tax cuts and this year he passed a tax relief package totaling close to a half billion dollars for this session.

All of these states are ready to welcome Pelican State businesses and jobs with open arms for example, take Gov. Rick Scott.  

“As Governor Edwards continues to rally behind tax increases and bad business policies, we stand ready to help Louisiana companies grow and create jobs in Florida,” Scott said in announcing his trade mission. “Florida has added over one million new jobs and our job growth rate is growing almost 60 percent faster than the national average. Many Louisianans already vacation in Florida, and they will save more of their money by moving their businesses to our state.”

Louisiana lawmakers are just digging the state into a deeper hole by enacting bad tax policy. While these ill thought out policies will be a boon for states like Texas, Tennessee, Florida, North Carolina, Mississippi, and Arkansas, they will be disastrous for Louisianans who will see an exodus of jobs and businesses. 

Photo Credit: 
Greg Nissen

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Jonathan Johnson Challenging Tax-Hiking Governor Gary Herbert in Utah

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Posted by Miriam Roff on Friday, June 17th, 2016, 10:22 AM PERMALINK


Jonathan Johnson (R-Utah) has signed the Taxpayer Protection Pledge in his bid to defeat incumbent Governor Gary Herbert. In signing the Pledge, a written commitment to voters to “oppose and veto any and all efforts to increase taxes,” Johnson has demonstrated that he is a staunch defender of Beehive State taxpayers.

His pledge can be viewed here.

Johnson is the only Republican candidate running against incumbent Gov. Herbert. Utah’s primary election will be held on Tuesday, June 28.

As governor, Herbert has supported and signed tax hikes into law. Just last year, Herbert signed a $75 million gas tax increase and a $76 million property tax hike. Herbert has also pushed to impose the tobacco tax on vapor products, a healthier alternative to smoking cigarettes.

Under Gov. Herbert’s tenure, taxpayers have been hit with $625 million in tax increases.

“By signing the pledge, Johnson demonstrates that he will protect taxpayers from higher taxes, something that Gov. Herbert has failed to do,” said Grover Norquist, president of Americans for Tax Reform. “While Gov. Herbert has been nothing but a rubber stamp for tax increases, Johnson understands that government should be reformed in a way that it spends and takes less taxpayer dollars, and will oppose tax increases that prolong failures of the past.”

Johnson is the former CEO and current board chairman of Overstock.com, a Utah-based online retailer.

Previously, he served as a clerk in the Utah Supreme Court, practiced corporate law at two international law firms, and was chief financial officer and general counsel at a publicly traded software company. A graduate of Brigham Young University law school, he also worked as an adjunct law professor.

Johnson serves on the governing boards of the Utah Technology Council, University of Utah Hospital Foundation, Utah Foundation, Salt Lake Chamber Clean Air Task Force, and Hale Centre Theatre.

Americans for Tax Reform offers the Pledge to all candidates for state and federal office. In the 114th Congress, 49 U.S. Senators and 218 members of the U.S. House of Representatives are pledge signers. Pledge signers include Senate Majority Leader Mitch McConnell, House Speaker Paul D. Ryan, House Majority Leader Kevin McCarthy, House Majority Whip Steve Scalise, and GOP Conference Chair Cathy McMorris Rodgers. Senate Finance Committee Chairman Orrin Hatch and House Ways and Means Committee Chairman Kevin Brady are also pledge signers.

On the state level, approximately 1,000 incumbent state legislators are Pledge signers. Eleven incumbent governors are pledge signers including Gov. Scott Walker (R-Wis.), Gov. Rick Scott (Fla.), Gov. Nikki Haley (S.C.), and Gov. Pat McCrory (N.C.).

 

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Taxpayer Protection Pledge Signer Doug Burgum Wins ND Governor Primary

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Posted by Miriam Roff on Thursday, June 16th, 2016, 3:18 PM PERMALINK


Americans for Tax Reform congratulates Doug Burgum (R- N.D.) on winning the North Dakota gubernatorial primary. Doug Burgum is a Taxpayer Protection Pledge signer.

Americans for Tax Reform offers the Pledge to all candidates for state and federal office. In the 114th Congress, 49 U.S. Senators and 218 members of the U.S. House of Representatives are pledge signers. Pledge signers include Senate Majority Leader Mitch McConnell, House Speaker Paul D. Ryan, House Majority Leader Kevin McCarthy, House Majority Whip Steve Scalise, and GOP Conference Chair Cathy McMorris Rodgers. Senate Finance Committee Chairman Orrin Hatch and House Ways and Means Committee Chairman Kevin Brady are also pledge signers.

On the state level, approximately 1,000 incumbent state legislators are Pledge signers. Eleven incumbent governors are pledge signers including Gov. Scott Walker (R-Wis.), Gov. Rick Scott (Fla.), Gov. Nikki Haley (S.C.), and Gov. Pat McCrory (N.C.).

Burgum is an entrepreneur and former CEO of Great Plains Software, purchased by Microsoft in 2001. Burgum has founded many successful businesses and in 2009 was awarded the Theodore Roosevelt Rough Rider Award, North Dakota’s highest honor, by then-Governor John Hoeven.

Burgum faces State Rep. Marvin Nelson (D) in the November election. 

Photo Credit: 
Doug Burgum

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Kansas Lawmakers Have no Need to Raise Taxes

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Posted by Miriam Roff on Wednesday, June 15th, 2016, 5:42 PM PERMALINK


The Kansas Supreme Court recently ruled that state lawmakers finished the 2016 legislative session without allocating enough funds to the education budget. The ruling means Kansas legislators must come up with nearly $40 million in additional funding for education. As a result, the Kansas state legislature is heading into special session on June 23 to resolve the matter.

One thing Kansas lawmakers should not consider to come up with new education funding is raising taxes further. Kansas taxpayers and the state economy have already suffered 20 federal tax increases over the last seven years and were hit with state tax hikes last year. Piling on with even higher taxes at the state level will only add insult to injury and is simply unnecessary with there is a pro-growth, free market alternative to raising additional funds: repealing onerous restrictions on alcohol sales, particularly those that prevent grocery stores from selling spirits.

Projections shows permitting the sale of licenses to grocery stores will generate an additional $41 million in revenue for fiscal year 2017 alone. Americans for Tax Reform sent the following letter to Kansas lawmakers in support of this pro-growth, free market approach to coming up with the funds needed to comply with the Kansas Supreme Court ruling and avoid further tax increases: 

June 14, 2016
 
To: Members of the Kansas Legislature
 
From: Americans for Tax Reform
 
Re: Reject Calls For Higher Taxes
 
Dear Legislators,
 
On behalf of Americans for Tax Reform (ATR) and our supporters across Kansas, I write today urging you to reject calls to raise taxes during the special session. Given your constituents have been hit with more than 20 federal tax increases over the last seven years, the last thing they need is for lawmakers in Topeka to pile on with higher state taxes. Another reason tax hikes should be off the table is that Kansas could easily generate additional resources by simply getting government out of the way and repealing onerous restrictions on alcohol sales, such as those preventing grocery stores from selling spirits.
 
There is no need to even consider raising taxes to pay for the $38 million in additional education spending that the Kansas Supreme Court recently ruled state legislators must come up with. Kansas lawmakers can more than cover these new funding needs by allowing grocery stores to sell spirits. Projections show the state would generate an additional $41 million in fiscal year 2017 alone from the sale of licenses for grocery stores.
 
Changing state law to permit the sale of spirits at grocery stores will make life easier for Kansas residents by permitting one stop shopping, and is an example of how policy innovation is the best alternative to raising taxes. In contrast, raising taxes is what politicians do instead of reforming government.
 
Reject calls for further tax hikes. Instead, expand commerce by lifting onerous restrictions on spirits sales. ATR will be following these issues closely during the special session and will be working in the coming months to educate Kansas taxpayers on how their representatives in the legislature vote on these and other important matters. If you have any questions, or if ATR can be of assistance, don’t hesitate to contact me or Patrick Gleason, ATR’s director of state affairs, via phone (202) 785-0266 or email pgleason@atr.org.
 
Sincerely,
 
 
Grover Norquist
President
Americans for Tax Reform
 
 
 
Photo Credit: 
Doug Kerr

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All North Dakota Gubernatorial Republican Candidates Sign Taxpayer Protection Pledge

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Posted by Miriam Roff on Thursday, June 9th, 2016, 11:48 AM PERMALINK


All North Dakota Republican gubernatorial candidates -- Wayne StenehjemDoug Burgum, and Paul Sorum -- have signed the Taxpayer Protection Pledge, a written commitment to state taxpayers. In signing the Pledge, these candidates remain staunch defenders of taxpayers through their commitment to “oppose any and all efforts to increase taxes.”
 
A copy of their pledge to North Dakota taxpayers can be seen here.
 
“It’s a good sign for the North Dakota economy that all three gubernatorial candidates state in writing their commitment to taxpayers to not raise taxes. Now is the time for all pro-taxpayer legislators to make the same commitment. We thank these candidates and urge others to do the same,” said Grover Norquist, president of Americans for Tax Reform, a taxpayer group founded in 1986 at the request of President Ronald Reagan.
 
Americans for Tax Reform offers the Pledge to all candidates for state and federal office. In the 114th Congress, 49 U.S. Senators and 218 members of the U.S. House of Representatives are pledge signers. Pledge signers include Senate Majority Leader Mitch McConnell, House Speaker Paul D. Ryan, House Majority Leader Kevin McCarthy, House Majority Whip Steve Scalise, and GOP Conference Chair Cathy McMorris Rodgers. Senate Finance Committee Chairman Orrin Hatch and House Ways and Means Committee Chairman Kevin Brady are also pledge signers.
 
On the state level, approximately 1,000 incumbent state legislators are Pledge signers. Eleven incumbent governors are pledge signers including Gov. Scott Walker (R-Wis.), Gov. Rick Scott (Fla.), Gov. Nikki Haley (S.C.), and Gov. Pat McCrory (N.C.).
 
Before becoming Attorney General, Stenehjem served two terms in the North Dakota House of Representatives and 20 years in the Senate. During his time in the Senate he was elected President Pro Tempore for the 1999 Legislative Session.
 
Burgum is an entrepreneur and former CEO of Great Plains Software, purchased by Microsoft in 2001. Burgum has founded many successful businesses and in 2009 was awarded the Theodore Roosevelt Rough Rider Award, North Dakota’s highest honor, by then-Governor John Hoeven.
 
Before becoming involved in politics, Paul Sorum taught architectural design at the University of Southern California, worked as a principle architect with a prominent architectural firm in Fargo, and wrote financial analysis software in his spare time for Community First Bank Shares of Fargo. In 2010, Sorum ran for U.S. Senate in North Dakota and in 2012 he ran for governor.
 
The primary is Tuesday, June 14.
Photo Credit: 
Jimmy Emerson, DVM

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Americans for Tax Reform Opposes Philadelphia Mayor's Soda Tax

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Posted by Miriam Roff on Tuesday, June 7th, 2016, 4:49 PM PERMALINK


Mayor Jim Kenney’s proposed Philadelphia-only tax will slap a $0.03 per ounce tax on over 1,000 beverages. Not only does this tax directly target sugary beverages it also disproportionately hits those that can least afford it—low-income consumers. By creating an environment of economic uncertainty through arbitrary taxation, Philadelphia is bound to make it harder for the city to attract jobs and increase wages. As low-income consumers spend a majority of their paycheck on consumer goods like soda, forcing them dig deeper into their pockets while thwarting job growth is neither a sound solution nor a responsible means of governing.

The Philadelphia City Council will vote on the mayor’s plan tomorrow morning.

ATR joined 13 other conservative groups in a letter today opposing Philadelphia Mayor Jim Kenney’s proposed Philly Grocery Tax.

Below is the letter and full list of signatories:

 

June 7, 2016

 

Council President, Darrell L. Clarke

City Council of Philadelphia

City Hall, Room 313

Philadelphia, PA 19107-3290

 

Dear Council President Clarke,

We, the following pro-growth, pro-job, free-market advocates are asking you to oppose Mayor Jim Kenney’s plan to impose a 3 cents-per-ounce tax on more than 1,000 beverages—the Philly Grocery Tax. The proposed Philadelphia-only tax will—as former Governor Ed Rendell made clear—unfairly hurt the city’s poorest residents while its wealthiest citizens will be able to avoid the tax altogether.

Lower income families and individuals may not have access to larger supermarkets that offer a wider variety of less expensive options. Or they may not own cars that allow them to travel outside the city for their grocery shopping. Or they may not have access to safe, reliable public transportation.

The Grocery Tax will rob many families and individuals of precious dollars from their household budgets. Fewer jobs and less income will mean many parents will spend less time with their children. Keeping children from their parents and families—their first, best teachers—ironically undermines what the Mayor hopes to achieve through universal pre-K.

Families and children will suffer under the Kenney tax, as will single adults and young people living paycheck to paycheck. Jobs will flee, wages will stagnate, and Philly’s poorest residents will suffer the most.

A tax on beverages is fundamentally unfair in two respects.

First, such a tax is regressive, betraying the principle of tax fairness. Mayor Kenney’s tax will disproportionately harm low-income individuals, as they spend a larger portion of their income on consumer goods like soda, and may not have the means to travel outside the city to shop.

Second, Mayor Kenney’s tax is arbitrary. There are many types of goods and services that could have been Mayor Kenney’s target, but the Mayor is specifically targeting sugary beverages. Arbitrary taxation creates economic uncertainty, hurting job growth and wage increases.    

Good tax policy should be pro-growth, simple, and fair. Mayor Kenney’s proposed Grocery Tax is none of these things.

The Mayor’s tax will hurt Philly’s poorest residents by driving up grocery bills and forcing businesses and jobs to flee Philadelphia for the suburbs.      

This unfair, unsustainable tax should be defeated. Our hope is that the Philadelphia City Council will reject Mayor Kenney’s Grocery Tax.

 

Thank you,

 

Grover Norquist- President, Americans for Tax Reform

Julie Gunlock – Senior Fellow, Independent Women’s Voice

Matt Brouillette – President, Commonwealth Foundation

Pete Sepp – President, National Taxpayers Union

Tom Giovanetti – President, Institute for Policy Innovation

Greg Conko – Executive Director, Competitive Enterprise Institute

David Williams – President, Taxpayers Protection Alliance

Andrew Langer – President, Institute for Liberty

George Landrith – President, Frontiers of Freedom

Phil Kerpen – President, American Commitment

Colin A. Hanna – President, Let Freedom Ring

Thomas Schatz – President, Citizens Against Government Waste

Jerry Rogers – President, Capitol Allies

Deroy Murdock – National Review Online

 

Photo Credit: 
Alan

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Oklahomans Latest Victims of Targeted Cigarette Tax Hike Campaign

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Posted by Miriam Roff on Thursday, April 7th, 2016, 10:10 AM PERMALINK


The purported “popularity” of a particular piece of public policy should not be the end-all justification for its passage. Such is certainly the case with efforts to raise taxes on tobacco products. Many state lawmakers have labeled these tax hikes as a win-win for taxpayers and the government because they have bought into the fallacy, perpetuated by organizations like the American Cancer Society Cancer Action Network, that the state revenue impact and affect on consumer behavior justify the targeting of low-income taxpayers with regressive tax hikes. These proponents are wrong.  

Oklahomans are the latest victims in the targeted campaign to address a state overspending problem with a cigarette tax hike.  And academics have been called in to help make the case for big government legislators. A Northeastern University professor of economics released a misguided report earlier this month bolstering Gov. Mary Fallin’s (R- Okla.) proposed $1.50-per-pack cigarette tax hike. Although the report insists that cigarette tax revenue increases with each hike and remains relatively stagnant in the following years, it fails to address and expand upon all of the consequences that come with tobacco tax increases.                                                                                          

The most vulnerable populations—small businesses and low-income families— are often the most affected by targeted excise tax hikes. Numerous studies suggest that levying higher tobacco taxes on consumers disproportionately harms low-income consumers—many of which expend almost a quarter of their income on cigarettes. Contrary to the claims made by the professor’s report and the American Cancer Society Action Network, these studies also suggest that higher taxes may not deter smoking. That’s because smokers often thwart the blow of this regressive tax increase by smoking fewer cigarettes more intensively, switching to less expensive or discount cigarettes, and by pursuing low or untaxed cigarettes.

As noted in the tobacconomics report, an Oklahoma tax increase would likely incentivize cigarette smuggling and cross-border sales into states like Missouri and Kansas. Yet, the report fails to examine the impact smuggling, as a direct result of the tax hike, has on small businesses in the state. According to the Tax Foundation, when Illinois nearly doubled the cigarette tax rate, cigarette smuggling rate dramatically increased from 1.1 percent to 20.9 percent in the first year. Small businesses like convenience stores in this state lost tens of thousands of dollars as patrons pursued cigarettes in less expensive markets across state lines.

When states become more reliant on tobacco taxes, budgeting also becomes more difficult. Targeted excise taxes have proven to be unsound sources of revenue that could lead to a reduction in tax receipts. For instance, when Illinois almost doubled its cigarette tax in 2012 by raising the tax $1-per-pack; it produced $138 million less than anticipated. Other states have had similar experiences as well, since only three out of the 32 state tobacco tax increases enacted between 2009 and 2013, have met or exceeded tax revenue estimates.

The unintended consequences that come with raising the cigarette tax should be enough to deter those in government from proposing these onerous tax hikes. And unfortunately for consumers and revenue-hungry politicians alike, these tax hikes often only serve as temporary placeholders for more broad-based tax increases down the road. Oklahomans would be wise to disregard this report and look to Illinois for an example as to what their state might become if lawmakers don’t get their act together by reducing spending in the Sooner State.  

Photo Credit: 
Elias Schewel

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Alabama Lawmakers Push for Gas Tax Hike and Tax on Digital Goods

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Posted by Miriam Roff on Wednesday, March 9th, 2016, 2:47 PM PERMALINK


This is the second year in a row that Alabama lawmakers have sought to tax digital goods such as Netflix, Amazon, and iTunes purchases as tangible items.  On top of that, there is also a push for a gas tax hike
 
Americans for Tax Reform President Grover Norquist sent a letter to Alabama legislators yesterday urging them to reject proposals to raise taxes on gas and digital goods:
 
March 8, 2016 
 
To: Members of the Alabama Legislature
 
From: Americans for Tax Reform
 
Re: The 2016 Session
 
Dear Members of the Alabama Legislature,
 
On behalf of Americans for Tax Reform and our supporters across the state, I write today to urge you to keep taxpayers in mind as you consider a vast number of important policy issues this legislative session. In just the last six years, your constituents have endured a historically sluggish economic recovery during which they have been hit with over 20 federal tax increases. While there are numerous pro-growth reform ideas that can make the state more attractive to future job creators and investors, keeping the tax burden as low as possible is the most conducive environment for economic growth. As such, it’s vital that lawmakers in the Yellowhammer State protect its citizens from job-killing tax increases at the state level in 2016.
 
The belief that keeping the tax burden as low as possible promotes economic growth is supported by a large body of evidence. John Hood, chairman of the John Locke Foundation, a Raleigh, N.C.-based think tank, analyzed over 680 peer-reviewed studies going back to 1990. Most of the studies Hood analyzed found that lower levels of taxes and spending correlate with stronger economic performance. When Tax Foundation economist William McBride reviewed academic literature going back three decades, he found “the results consistently point to significant negative effects of taxes on economic growth even after controlling for various other factors such as government spending, business cycle conditions and monetary policy.” In McBride’s survey of 26 studies dating to 1983, he found “all but three of those studies, and every study in the last 15 years, find a negative effect of taxes on growth.”
 
The biggest threats to Alabama taxpayers this year are the proposals to tax digital download and raise the gas tax. These tax hikes would only make it harder for Alabama to compete with other states for jobs, investment, and people. Tax policy has a major impact on a state’s economic health. Demonstrating this is the fact that the top 10 states with the lowest tax burden saw average GDP growth that was 24 percent greater over the last decade than the ten bottom states with the highest tax burden. 
 
If transportation funding were truly a funding priority for legislators, they would make it one by funding it with existing revenue and by ensuring that all gas tax revenue is used for transportation. Currently, funds from the gas tax revenue collected are distributed to the State Water Safety Fund, the Seafood Fund, and the Game and Fish Fund.
 
I also urge you to reject SB 242, legislation that would apply sales or rental taxes to digital goods such as, iTunes, Netflix, Amazon, etc. Expanding the definition of tangible personal property to include digital goods would make the tax code increasingly more difficult for lawmakers and users to navigate. For example, if an Alabaman downloads an e-book in Colorado, where would the tax apply? Secondly, as users are only paying for a license and not ownership of these goods, digital goods should not be treated the same as material goods. 
 
With states across the nation passing rate-reducing tax reform, raising state taxes would only make it harder for Alabama to compete. As such, I urge you to stand up for Alabama taxpayers by rejecting proposals to further raise taxes. Americans for Tax Reform will be following these issues closely throughout the year and will be educating your constituents as to how you vote on these important matters. If you have any questions, or if ATR can be of assistance, please contact Miriam Roff, Americans for Tax Reform’s state affairs coordinator, at mroff@atr.org.
 
Onward,
 
Grover Norquist
 
President
 
Americans for Tax Reform
Photo Credit: 
Silvia Calderon

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Fear Mongering and Tax Hikes in Louisiana

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Posted by Miriam Roff on Wednesday, March 2nd, 2016, 12:59 PM PERMALINK


In an attempt to gain support from Louisiana legislators for the largest tax increase in the state’s history Gov. John Bel Edwards (D- La.) has resorted to fear mongering, holding college football and special needs funding hostage. Unfortunately for taxpayers, it appears to be working.

On Thursday of last week, in the third week of a special session called by Gov. Edwards, the House passed the following tax increases:

  1. 25 percent sales tax increase
  2. Internet Sales Tax
  3. Stores, Vendors Tax Increase
  4. Airbnb Rental Tax
  5. Vendors Must Pay Tax in Advance
  6. Fewer Corporate Tax Deductions
  7. Rental Car Tax Hike

 

The tax hikes proposed by Gov. Edwards would put Louisiana at a greater disadvantage when competing with other states for jobs and investment. While neighboring states, such as Texas and Florida, already have more hospitable business tax climates than Louisiana, are continuing to increase their advantage by enacting further rate-reducing tax reform. Pelican State legislators are moving in the opposite direction by hiking taxes and reducing the job-creating capacity of Louisiana employers.

Louisianans already contend with the third largest combined state and local sales tax in the U.S. at 9.1 percent. If the proposed sales tax increase passes the senate, Louisiana will not only be famous for Mardi Gras and its Cajun cuisine, but also for having the largest sales tax burden in the nation at 10.1 percent. Although this tax was first proposed as temporary—only lasting 18 months— Gov. Edwards is going back on his word, yet again, and is backing a 5 year sales tax boost. It’s crystal clear that the last thing your constituents and the economy needs is an even higher sales tax, as constituents can barely afford to purchase goods as it is.

In addition to raising sales taxes, congressmen are expanding e-commerce taxing authority and raising online sales taxes as well. The proposed legislation hikes online sales taxes that in some localities will also reach close to 10 percent combined state and local tax.  Only small businesses that can prove that they have less than $50,000 in gross receipts for the upcoming year, not profits, will not be liable for the tax. Yet, the small businesses that can afford the tax will operate at a loss.  Collecting taxes on (projected) gross receipts will put small dealers even further in the red.  Even if a business sells less than the $50,000 they will still have to track where a purchase goes and the amount of sales tax collected for Louisiana. These are excessive reporting requirements that expose small businesses to harassment by state and local tax collection authorities.

In a state that relies heavily on the tourism industry, levying a four percent tax on Airbnbs and a three percent tax on rental cars is also bad for the Louisiana economy. Efforts to export the tax burden onto those who cannot vote lawmakers out of office is nothing new. State and local lawmakers try it all the time. This approach, however, backfires, as travel industry taxes, such as those on hotels and rental cars, hurt the local economy and do end up hitting Louisiana taxpayers. Making it increasingly more expensive to experience Jazz Fest, Mardi Gras, and taste jambalaya, will deter tourists from exploring the Sportsman’s Paradise, which would be a huge hit to the local economy.

The Louisiana government has an overspending problem not a revenue problem. Over the last decade Louisiana has spent $185 billion. Had the state kept spending in line with inflation and population growth, the state would have spent over $34 billion less. Rather than further raise taxes on individuals, families, and employers, legislators should make necessary reforms to put state revenues in line with spending without raising taxes further.

After being hit with more than 20 federal tax hikes over the last six years, the last thing Louisiana taxpayers need is to be hit with more tax hikes at the state level.  

Photo Credit: 
Ken Lund

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