Patrick Gleason

Wyoming Lawmakers Vote To Advance Corporate Tax

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Posted by Patrick Gleason on Saturday, September 21st, 2019, 8:07 PM PERMALINK

Wyoming is one of two states that does not impose a corporate income tax on employers, but that could change in 2020. Earlier this year Wyoming lawmakers debated legislation, House Bill 220, that would institute a 7% state corporate tax. The Wyoming House of Representatives passed that bill but the Legislature adjourned without the state Senate doing likewise. However that proposed corporate tax, as was predicted at the time, did not die with the 2019 legislative session. The proposal is now back and primed to pass both chambers of the Wyoming Legislature in 2020.

This week the Wyoming Joint Revenue Committee approved a new version of the proposed  corporate tax, which would apply to companies with more than 100 shareholders by a 9-4 vote. Were state lawmakers to enact a corporate tax in 2020, that would have Wyoming moving in the opposite direction of many states and nations, which have been cutting their corporate taxes in recent years.

While proponents of the proposed corporate tax portray the levy as a way to soak large corporations, the burden of a corporate tax would be borne by both business owners and workers. That’s why key non-partisan fiscal scorekeepers, such as the Congressional Budget Office and the congressional Joint Committee on Taxation, have adjusted their methodology in recent years to account for the harm corporate taxes do to workers.

In addition to the tens of millions of dollars it is estimated the proposed corporate tax would siphon from employers to fill state coffers, the corporate tax advanced by Wyoming Revenue Committee members this week would also lay the groundwork for a personal income tax.

“The bill has a little-noticed feature in it that allows for the creation of a personal income tax,” explains Sven Larson, a senior fellow at the Wyoming Liberty Group, a Cheyenne-based think tank. “If this bill becomes law Wyoming will have the legal infrastructure in place for both a corporate and a personal income tax.”

In addition to the costs a corporate tax would impose on businesses and the negative impact it would have on the state economy, a corporate tax would cost Wyoming taxpayers millions of dollars just to collect.

“The system to collect these taxes would cost $10 million to set up and $3 million to maintain, along with $1.5 million for staff – costing essentially 10 percent of the rough revenue estimate annually,” the Casper Star-Tribune reported earlier this year as the corporate tax proposal worked its way through the Legislature.

There is a wealth of social science demonstrating that corporate taxes are one of the most economically destructive ways to fill government coffers. That’s why states across the country and nations across the globe have been cutting corporate tax rates and reducing their reliance on them in recent years.

The corporate tax isn’t the only tax hike threat facing individuals, families, and employers across Wyoming. State lawmakers in Cheyenne are also advancing tax hikes on property, sales, and nicotine. Altogether, 2020 is shaping up to be Taxmageddon in Wyoming.

Photo Credit: Roger Smith


Alabama Governor Signs 55% Gas Tax Hike That Was Rushed Through Legislature In Five Days

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Posted by Patrick Gleason on Wednesday, March 13th, 2019, 12:28 PM PERMALINK

Less than a week after being initially introduced in the statehouse, Alabama Governor Kay Ivey (R) signed into law a 10 cent per gallon gas tax hike that will be phased in over the course of three years. 

“The plan would raise an estimated $320 million a year for road construction and maintenance,” reports Mike Cason, who covers the Alabama Statehouse for the Alabama Media Group. "About $12 million a year would go to a project to improve the shipping channel in the port of Mobile.”

The bill enacted by Governor Ivey and bipartisan majorities of the Alabama House and Senate represents a more than 55% increase in the state’s gas tax rate, which currently stands an 18 cents per gallon for gasoline and 19 cents for diesel. 

In accordance with the new law, Alabama’s tax on gas and diesel fuel will rise by 6 cents per gallon after August 31 of this year. The rate will increase by 2 cents a gallon on October 1, 2020, and again one year after that. 

This 55% gas tax increase was the first action taken by many new members of the Alabama House and Senate. According to a poll released this week by Alabama First Committee, the tax hike is not popular with the public, with the poll showing 85.2% opposing the bill to hike the state’s gas tax that was enacted yesterday. 

“It is clear that Alabamians across the state want better roads and bridges, but they are overwhelming opposed to higher gasoline taxes,” said former Tuscaloosa County Commissioner Don Wallace, chairman of Alabama First, the organization the commissioned the new poll.

Alabama officials have misdirected gas tax revenues for non-transportation purposes in the past by hundreds of millions of dollars. It will be interesting to see if such misappropriation will continue now that Governor Ivey and state lawmakers have just taken action to take more money from taxpayers at the pump. Alabama taxpayers aren't out of the woods yet. Republican leadership in the Alabama legislature reportedly has plans to hike other taxes this session, as well as expand Medicaid in accordance with Obamacare.

Photo Credit: Jimmy Emerson, DVM


Another Blue State Rejects A Carbon Tax

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Posted by Patrick Gleason on Friday, March 1st, 2019, 10:36 AM PERMALINK

While Congressman Francis Rooney (R-Fla.) and Democrats in Congress push legislation to impose a national carbon tax, they can’t even convince one left-leaning blue state to take the first step by implementing a state level carbon tax. Those calling for a carbon tax just received their latest blue state rejection this week in Maine. 

In a committee hearing in the Maine House of Representatives yesterday, Rep. Deane Rykerson (D-Kittery), the lawmaker sponsoring legislation to impose the nation’s first statewide carbon tax, announced that he will be pulling the bill and replacing it a “Carbon Pricing Study Group” that will explore the topic and issue recommendations. 

Nick Isgro, mayor of Waterville and vice chairman of the Maine Republican Party, announced this major win for Maine taxpayers on Twitter yesterday:

"Thanks to a bipartisan coalition of grassroots citizens who journeyed with me to Our Capitol, the @MaineDems/@saragideon agenda to raise heating oil prices on Maine families is in retreat! The sponsor now wants the tax bill replaced with a study. Thank you all...WIN! #mepolitics pic.twitter.com/urzsxXSQCT"— Mayor Nick Isgro (@MaineMayorNick) March 1, 2019

“This is a middle- and low-income family crushing tax,” said Mayor Isgro. Yet while proponents of this regressive new tax hike remain unable to convince even one Democrat-run blue state to lead the way on the issue, that isn’t stopping them from trying to take their campaign national. 

Today, less than a day after Maine Democrats declined to move forward with a carbon tax, Washington State Governor Jay Inslee (D) announced his bid for president. Gov. Inslee, is an ardent carbon tax proponent, but has seen his proposal rejected by his own constituents twice in the last three years. 

In the same elections that Evergreen State voters gave Democrats complete control of state government, they also rejected two ballot measures to impose a statewide carbon tax, one of which was designed to be revenue neutral (environment groups opposed the revenue neutral carbon tax ballot measure because it didn’t raise revenue and grow the size of government, which exposes how emissions reduction is not the real goal of green groups). Mainers are just the latest group of voters to reject the carbon at the ballot box.

This taxpayer victory in Maine is the latest data point documenting how carbon taxes, in addition to being terrible policy that would do the greatest harm to low income families who can least afford it, are also terrible politics, even in blue states.

Photo Credit: Jim Bowen


ATR Urges Wyoming Lawmakers To Reject Calls To Impose A Corporate Tax


Posted by Patrick Gleason on Friday, February 22nd, 2019, 9:50 AM PERMALINK

It was reported in multiple news outlets earlier this week that House Bill 220, legislation pending in the Wyoming Senate that would impose a 7% state corporate income tax on certain companies, had been defeated in committee on Tuesday and was officially dead for the year. 

That is no longer the case. According to sources on the groud in Cheyenne and an article published in the Casper Star-Tribune last night, some Wyoming lawmakers are making an aggressive push to revive the corporate tax and ram in through int the final days of the legislative session, which ends next week. 

In response to the rumored push to revive the proposed corporate tax and pass it in a hasty and opaque manner, Americans for Tax Reform sent the following letter to Wyoming Senators last night urging them to reject this effort:

 

To: Members of the Wyoming Senate

From: Americans for Tax Reform

 

Re: HB 220 & Efforts to revive and rush through a corporate income tax

 

Dear Senator,

 

I write to address persistent rumors that HB 220, legislation that would impose a corporate income tax, may be resurrected in an amendment to another bill. I urge you to reject calls to revive the 7% corporate tax included in HB 220 and rush it through before the session ends next week. Were the state’s first income tax to be instituted in such a hasty and opaque manner, it would send a truly terrible message about what kind of place Wyoming is to do business. 

 

Imposing an income tax that will have unintended negative consequences is bad enough. It’s even worse when it’s done in a rushed manner, with rules and typical procedures suspended.  Do Wyoming lawmakers want their state to be a place where a major new tax can be imposed rapidly, through opaque machinations that bypass the typical committee process and disregard established deadlines? We’ll soon find out. If so, it could have a chilling effect on in-state investment. 

 

The claim that this proposed 7% tax is merely capturing revenue that is already taxed in other states in not accurate. Many other states lack throwback rules, making this proposal mostly a new tax liability. As the non-partisan Tax Foundation has pointed out, HB 220 is not a costless tax. It would harm the state’s economy and business tax climate. This corporate tax wouldn’t just capture money for Wyoming coffers that otherwise would have gone elsewhere. This tax would hit Wyoming residents, perhaps through higher prices, possibly in the form of fewer options, or both.

 

A Corporate Tax Harms Workers, Not Just Owners Of Capital

 

In recent years the major non-partisan federal government scorekeepers acknowledged for the first time ever that corporate taxes, and corporate tax hikes like those proposed by congressional Democrats and now state legislators in Wyoming, are borne in part by workers.

 

The congressional Joint Committee on Taxation (JCT) announced in a 2013 study that the JCT would henceforth be reporting the affect that corporate taxes and corporate tax changes have on both labor and capital. Prior to that 2013 change, JCT models assumed that the burden of corporate taxes was borne entirely by the owners of capital (stocks, bonds, mutual funds, IRAs and so on).

 

That move by the JCT five years ago followed similar model adjustments by the Treasury Department and the Congressional Budget Office that account for the share of corporate taxes borne by labor. Interestingly enough, it was during the Obama administration, which enacted billions of dollars in higher taxes, that key non-partisan fiscal scorekeepers began to formally recognize that  corporate taxes are paid for, in part, by workers in the form of lower pay, fewer benefits, and reduced job opportunities. As such,  by imposing a state corporate tax, you and your colleagues would harm workers and shareholders alike .

 

A Terrible Time for a Tax Hike

 

It’s no coincidence that the U.S. has reclaimed the number one spot on the World Economic Forum’s Global Competitiveness Index following enactment of federal tax reform that significantly cut federal income tax rates, both personal and corporate. It’s clear that many investors, CEOs, and site selectors are bullish on the U.S. relative to other potential destinations for their capital.

 

Yet once business owners or investors make the decision to bring new capital or create jobs in the U.S., either by relocating or expanding operations stateside, they then have 50 choices before them when it comes to which state to choose. That’s why it is more important than ever for legislators in Cheyenne to do everything they can to make Wyoming a more attractive place to invest, do business, live, and raise a family.

 

Your constituents are counting on you to protect their pocketbooks and to reject misguided proposals that would harm the Wyoming economy.  As such, I urge you to reject efforts to bring HB 220’s 7% corporate income tax back to life. I thank you for your public service. If you have any questions or if ATR can be of assistance, don’t hesitate to contact me at 202-785-0266.  

 

Sincerely,

 

Grover G. Norquist

President

Americans for Tax Reform

 

 


Georgia Lawmakers Ponder A Netflix Tax

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Posted by Patrick Gleason on Thursday, February 14th, 2019, 10:30 AM PERMALINK

Politicians are coming up with new ways to eat into household budgets and deplete personal bank accounts. It’s not just blue state lawmakers who are busy looking for ways to siphon more revenue from the private economy and into state coffers. 

Take the Republican-run state of Georgia, where Representative Jay Powell (R), chairman of the House Rules Committee, is pushing for a new tax on internet services like Netflix and Hulu, as well as digital goods like iTunes music downloads and e-books. 

“The 4 percent communications service tax would replace the state’s existing taxes and fees on phone lines and cable TV, which range from 5 percent to over 7 percent,” reports the Atlanta Journal-Constitution

Governor Brian Kemp (R) and Lt. Governor Geoff Duncan (R) have both come out in opposition to the proposal. Governor Kemp is a signer of the Taxpayer Protection Pledge, a written commitment to Georgia taxpayers that he will oppose and veto any and all efforts to raise state taxes. 

“My first inclination is not to look at tax increases to pay for this,” Kemp said in recent interview with Georgia Public Broadcasting. “If we’re going to have some sort of offset, I’d be open to looking at that. I don’t know that raising taxes is the answer for me.”

The tax hike proposed by Rep. Powell is intended to fund rural broadband. Lt. Gov. Duncan tweeted that while he shares the goal of increasing rural broadband access, he thinks that Rep. Powell’s proposed tax hike is the wrong way to go about it.

 

 

Americans for Tax Reform is urging Georgia lawmakers to reject this tax hike.


Governor Kay Macron?

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Posted by Patrick Gleason on Tuesday, January 15th, 2019, 9:44 AM PERMALINK

The Yellowhammer State appears primed for a Yellow Vest protest of its own. Weeks after French President Emmanuel Macron had to pull the plug on his proposed gas tax hike, Alabama's new governor is now making a go of raising levies on fuel. 

Alabama Governor Kay Ivey (R) was sworn in yesterday at the state capitol in Montgomery. In her inauguration speech, Gov. Ivey made clear that hiking the state gas tax will be one of her top priority right out of the starting blocks. 

“I never thought I would hear a Republican talk about tax increases and prisons in an inaugural address, or in the same inaugural address,” said Representative Chris England (D-Tuscaloosa), who is chairman of the Democratic caucus in the Alabama House of Representatives. 

Gov. Ivey’s campaign for a regressive tax hike in a state sandwiched between two zero income tax states stands in stark contrast to her counterparts in the region. To Alabama’s north, Tennessee Governor-elect Bill Lee has promised in writing that he will veto any and all efforts to raise taxes. While it appears Gov. Ivey is making a gas tax hike in Alabama one of her top priorities, Lee meanwhile has stated that one of his top fiscal goals will be providing tax relief to employers in Tennessee: 

“We've made progress cutting taxes for individuals, but we are tied for the highest tax rate on business entities in the Southeast,” Lee said on the campaign trail last year. “High taxes on businesses mean high taxes on consumers. Now is the opportunity to build on past successes and make Tennessee an even better place to do business.”

On Alabama’s southern border, Florida has a new governor in Ron DeSantis (R-FL) who, like Gov. Lee in Tennessee, has committed in writing to vetoing net tax hikes of the sort that Gov. Ivey is leading with. 

Alabama lawmakers convene their new legislative session on March 5th. If Alabama taxpayers want avoid paying higher taxes at the pump, now is the time for them to get in touch with their representatives at the state capital. As Gov. Ivey’s inaugural address makes clear, there will be a powerful and well-funded push for a gas tax hike in 2019. While well-heeled lobbyists will tout Ivey’s proposal, they are pushing a tax increase that would do the greatest harm to Alabama households who are least able to afford the additional cost.

Photo Credit: Jimmy Emerson, DVM

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ATR Urges South Carolina Lawmakers To Make Tax Reform A Top Priority In 2019

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Posted by Patrick Gleason on Monday, January 14th, 2019, 12:01 PM PERMALINK

New sessions have commenced in most of the nation's state legislatures over the past two weeks, including South Carolina's, where Gov. Henry McMaster (R), a Taxpayer Protection Pledge signer, was sworn in for his first full term in office last week.

 

Among the states most in need of tax reform is the Palmetto State. As Americans for Tax Reform pointed out in a letter sent to all South Carolina legislators today, lawmakers who recently convened in Columbia don't have to look far for examples of how to do pro-growth tax reform. In fact, they're surrounded by states that demonstrate how to do it.

 

To: Members of the South Carolina Senate

From: Americans for Tax Reform

Dear Senator,

As you convene in Columbia for the new legislative session, I write to urge you and your colleagues to use the coming year to enact reforms that will help grow the South Carolina economy and protect taxpayers.

 

While there are many opportunities to improve South Carolina’s tax and regulatory climate, it’s important to first do no harm. As such, I urge that you reject any and all efforts to raise taxes, especially at a time when the Palmetto State is great need of rate-reducing tax reform of the sort recently enacted in North Carolina. South Carolina’s existing tax code is uncompetitive, with rates that are too high. Fortunately, your counterparts in North Carolina have enacted a series of fiscal reforms that provide a model for how to do pro-growth, rate-reducing tax reform in a responsible manner.

 

The experience in North Carolina demonstrates just how much progress can be made in a short period of time. As recently as five years ago, North Carolina had higher personal and corporate income tax rates than those in South Carolina. Thanks to the enactment of rate-reducing tax reform in 2013 and 2015 based on revenue triggers, North Carolina now has the nation’s lowest corporate tax rate and the lowest state income tax rate in the region when not counting the zero income tax states of Tennessee and Florida.

 

North Carolina taxpayers received their latest in a series of income tax cuts on January 1st of this year, when another round of personal and corporate rate reductions took effect. North Carolina’s experience with tax reform demonstrates how it is possible to simultaneously provide relief for taxpayers, increase teacher pay, realize budget surpluses, and grow the state rainy day fund.

 

North Carolina isn’t the only nearby state that has been a national leader in passing rate-reducing tax reform. Tennessee, which has long had the advantage of being one of nine states with no income tax, recently repealed its state death tax, and is phasing out its tax on investment income. The Volunteer State isn’t letting off the gas when it comes to making that state even more competitive. The new governor there, Governor-elect Bill Lee, has made clear that providing tax relief for employers will be a high priority in his new administrative. It would behoove South Carolina lawmakers and the state’s economy to do likewise in 2019.

 

Tax Reform Needed In South Carolina Now More Than Ever

 

It’s no coincidence that the U.S. has reclaimed the number one spot on the World Economic Forum’s Global Competitiveness Index following enactment of federal tax reform that significantly cut federal income tax rates, both personal and corporate. It’s clear that many investors, CEOs, and site selectors are bullish on the U.S. relative to other potential destinations for their capital.

 

Yet once business owners or investors make the decision to bring new capital or create jobs in the U.S., either by relocating or expanding operations stateside, they then have 50 choices before them when it comes to which state to choose. That’s why it is more important than ever for legislators in Columbia to do everything they can to make South Carolina a more attractive place to invest, do business, live, and raise a family.

 

Individual Tax Relief Benefits Households and Small Businesses

 

South Carolina is sandwiched between two states that both have lower state income tax rates, and just beyond those bordering states are the two zero income tax economic powerhouses of Florida and Tennessee. Passing tax reform that reduces and flattens the state’s personal income tax rate will ensure that South Carolina remains not just regionally competitive, but also nationally and globally competitive.

 

In addition to providing needed relief to Palmetto State families, personal income tax relief would also increase the job-creating capacity of thousands of small businesses across the state. According to IRS data, more than 357,000 sole proprietors alone in South Carolina file under the individual income tax system. When factoring in S-Corps and partnerships, thousands more South Carolina small businesses would also benefit from a reduction in the personal income tax rate.

 

Corporate Tax Relief Benefits Everyone

 

In recent years non-partisan federal government scorekeepers acknowledged for the first time ever that corporate taxes, and corporate tax hikes like those proposed by congressional Democrats, are borne in part by workers. The Congressional Joint Committee on Taxation (JCT) announced in an October 2013 study that the JCT would henceforth be reporting the affect that corporate taxes and corporate tax changes have on both labor and capital. Prior to that 2013 change, JCT models assumed that the burden of corporate taxes was borne entirely by the owners of capital (stocks, bonds, mutual funds, IRAs and so on).

 

That move by the JCT five years ago followed similar model adjustments by the Treasury Department and the Congressional Budget Office that account for the share of corporate taxes borne by labor. Interestingly enough, it was during the Obama administration, which enacted trillions of dollars in higher taxes, that key non-partisan fiscal scorekeepers began to formally recognize that corporate taxes are paid for, in part, by workers in the form of lower pay, fewer benefits, and reduced job opportunities. As such, by reducing the state corporate tax rate, you and your colleagues would benefit shareholders and workers alike.

 

Your constituents are counting on you to protect their pocketbooks. I urge you and your colleagues to make 2019 the year that South Carolina passes rate-reducing, pro-growth tax reform. I thank you for your public service. If you have any questions or if ATR can be of assistance, don’t hesitate to contact me at 202-785-0266. 

 

Sincerely,

  

Grover G. Norquist

President

Americans for Tax Reform

Photo Credit: Ron Cogswell


Taxpayer Win: North Carolina Voters Approve Tax Cap

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Posted by Patrick Gleason on Tuesday, November 6th, 2018, 9:45 PM PERMALINK

In the Tar Heel State, voters have lowered North Carolina’s constitutional income tax cap, currently set at 10%, to 7%. Voters passed the Income Tax Cap Amendment with more than 57% of voters approving of the measure.

The state’s income tax rate stands at 5.499% and is scheduled to drop to 5.25% on January 1, 2019. Governor Roy Cooper and the North Carolina Democratic Party came out against the measure, even though the reduced income tax cap of 7% would still permit a more than 33% state income tax increase.

Photo Credit: Chris Potter


Gov. Scott Walker Looks to Return Budget Surplus Back to Badger State Taxpayers

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Posted by Patrick Gleason on Tuesday, January 30th, 2018, 1:52 PM PERMALINK

The media is abuzz with what President Trump will or won’t say during his first State of the Union Address this evening. Yet a number of state chief executives have already introduced some exciting reforms during the annual speeches to their state legislative bodies.

Take Governor Scott Walker, who has already used his time in office to enact a host of transformative and innovative fiscal reforms that have saved Badger State taxpayers billions. During his State of the State Address last week, Gov. Walker proposed further reforms that would allow Wisconsin taxpayers to keep more of their hard-earned income. The spending restraint of previous years, combined with the institution of pro-growth reforms have produced a budget surplus this year, which Gov. Walker has proposed returning to taxpayers with a new $100 per-child tax credit.

Walker’s proposed child tax credit, if enacted, would return a projected $122 million to 671,000 Wisconsin households this year. Also proposed were further entitlement reforms, including the institution of work and training requirements for able-bodied adults receiving food stamps. Gov. Walker used his address to explain how the conservative reforms enacted in previous years have will permit state officials to provide further relief to taxpayers in 2018:

“Our plan is simple. Our reforms are working. Our economy is growing. And because of all this, we have a budget surplus. I want to give it back to you. It’s your money; not the government’s. So, if you’ve got three kids at home under the age of 18, that’s $300 more this year for new shoes, coats, activity fees at school, or a co-pay at the doctor or dentist.”

Grover Norquist, president of Americans for Tax Reform, commends Wisconsin Gov. Scott Walker for being one of the nation’s top taxpayer champions, and for his latest round of reforms:

“Gov. Walker has been a national leader in passing pro-growth, pro-taxpayer reforms. Through the historic Act 10 entitlement reforms alone, Gov. Walker has saved state taxpayers over $5 billion dollars,” Norquist said. “His repeal of inflated wage requirements has also reduced the taxpayer cost of state and local infrastructure projects. Gov. Walker has used savings from these and other reforms to return $8 billion back to Badger State taxpayers through various tax relieving measures over the years, including the elimination of three entire taxes last year alone. With his recent State of the State Address, Gov. Walker has made clear he is not going to rest on his laurels, and is instead going to use 2018 continue building on an already impressive record of pro-taxpayer reforms.”

Photo Credit: Gage Skidmore

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Chicago Repeals Soda Tax

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Posted by Patrick Gleason on Wednesday, October 11th, 2017, 2:33 PM PERMALINK

In a blow to Michael Bloomberg’s nanny-state crusade, the Cook County Board today voted to abolish Chicago’s hated pop tax.

Cook County was the largest municipality in the U.S. to levy a soda tax. The one-cent per ounce soda tax, which went into effect in August, required a rare tie-breaking vote from Cook County Board President Toni Preckwinkle, the top champion of that regressive tax hike, in order to receive final passage back in November of 2016.

After a fierce public backlash against the tax, the board repealed the tax today by a vote of 15 -1. The soda tax was a top priority of former New York City mayor Bloomberg. He dumped $5 million into a pro-soda-tax campaign in the county.

This is the second recent major defeat for Bloomberg. Santa Fe voters overwhelmingly rejected a ballot measure that would have imposed a soda tax in that city.

"If there is one city America’s tax and spenders should be able muscle through the latest tax fad, it would be Chicago. And yet in this tax and spend, Democrat-run city, consumers forced the city council to cough up their recent tax hike and repeal the soda tax,” said Grover Norquist, president of Americans for Tax Reform. “This is huge victory for consumers and taxpayers and demonstrates to the world that there is a limit to the burden taxpayers will carry—even in Chicago.”

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