Patrick M. Gleason

ATR Urges PA Legislators to Get State Out of Liquor Business, Avoid Tax Hikes


Posted by Patrick M. Gleason on Thursday, June 5th, 2014, 4:54 PM PERMALINK

Pennsylvania state legislators are spending the month of June hammering out a 2014-2015 budget agreement. The topic of most concern: the estimated $1.3 billion projected budget deficit and how to address it. ATR applauds Governor Tom Corbett (R-Pa.) for making it abundantly clear earlier this week that increasing taxes is not the solution to this issue.

ATR sent a letter to Pennsylvania legislators today urging them to stand with Gov. Corbett in defense of Pennsylvania taxpayers and pass reasonable and fiscally responsible reform that will help balance the budget without higher taxes: ending Pennsylvania’s 80 year government monopoly on liquor and wine sales. Currently Pennsylvania is only one of two states where the government controls wine and spirits sales and distribution. By getting government out of the alcohol business, Pennsylvania can generate $1 billion for government coffers. The letter that ATR sent is as follows:

 

 

Dear Members of the Pennsylvania Legislature,

 

Governor Tom Corbett made clear this week that the budget should be balanced without raising taxes and I write today to encourage you to join him in standing up for Pennsylvania taxpayers. Your constituents have been hit with over 20 new or higher federal taxes by lawmakers in Washington over just the last four years and Pennsylvania taxpayers already contend with the 10th highest state and local tax burden in the country. In light of these facts and a weak economy that actually contracted in the first quarter of the year, the last thing Pennsylvania taxpayers and the commonwealth economy need are higher taxes imposed from Harrisburg.

 

There are numerous ways to balance the budget without resorting to tax hikes, but one of the best and most fiscally sound ways to work toward that goal is to get the state out of the liquor and wine business. It is estimated that selling off the state run alcohol stores could generate as much as $1 billion in revenue for the commonwealth. Aside from serving as a great way to balance the budget without taking more of Pennsylvania taxpayers’ hard-earned income, privatization is a good idea because wholesale distribution and retail sales of liquor and wine are simply not a core functions of government.

 

The House of Representatives commendably passed legislation (HB 790) last year to gradually get the government out of the alcohol business, and I urge the Senate to do likewise. However, a proposal that would only privatize wine sales is now under consideration. Make no mistake, a wine only privatization bill is not real reform and would keep the current state-run alcohol wholesale and retail system in place, at a cost of $400 million per year to Pennsylvania taxpayers.

 

Putting aside the numerous economic reasons for Pennsylvania to get out of the alcohol sales business, the commonwealth’s liquor and wine monopoly has begotten a breeding ground for corruption. For example, the state’s ethics commission recently found several Pennsylvania Liquor Control Board members guilty of taking gifts from PLCB vendors. As the Commonwealth Foundation accurately points out, “if government bureaucrats did not have the sole authority to determine what alcohol is sold in all the state’s liquor stores, businesses would have no incentive to bribe them with golf outings, fancy dinners, and free liquor.”

 

It’s time for the state’s 80 year monopoly on wine and spirits sales to end. If lawmakers could balance the budget this summer without tax increases, and get the state out of the liquor and wine sales business once and for all, members of the legislature would have a strong case to make to voters this fall who are looking for fiscally responsible candidates who will stand up for taxpayers. Americans for Tax Reform will be educating Pennsylvania taxpayers as to how their state senators and representatives vote on these important matters. If ATR can be of any assistance, don’t hesitate to contact Patrick Gleason, ATR’s Director of State Affairs, at 202-785-0266 or pgleason@atr.org.

 

Onward,

Grover Norquist

President, Americans for Tax Reform

 

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Democrat States Hike Spending at Quadruple the Rate of GOP States


Posted by Patrick M. Gleason, Max Velthoven on Wednesday, May 21st, 2014, 9:17 AM PERMALINK

States under full Democrat control have increased total spending over 400 percent faster than states under full Republican control, according to a newly released analysis by Americans for Tax Reform.

           

Looking at the National Association of State Budget Officers’ most recent state expenditures report, ATR compared the growth in both General Fund and Total Expenditures from 2011 to 2013 in the 13 states where Democrats have unified control of the governor’s mansion and both chambers of the legislature, as well as the 24 states where the GOP has total control of state government. Key findings include:

- Significantly higher levels of growth in government spending in the 13 states where Democrats have unified control of the governor’s mansion and both chambers of the legislature, compared with the 24 states where the GOP has total control of state government.

- General Fund Expenditures went up 6.25 percent over 2011-2013 in GOP-run states, whereas in Democrat-controlled states General Fund Expenditures went up 9.95 percent. This 3.7 point difference means that Democrat states increased general fund spending 59 percent faster than GOP states since 2010.  

- Total Expenditures increased 1.11 percent from 2011-2013 in Republican-run states, whereas Total Expenditures in Democrat-controlled states shot up by 5.55 percent. This 4.44 percent difference means that Democrat-controlled states increased total spending over 400 percent faster than in Republican-run states.

-10 Republican states actually decreased their total expenditures from 2011 to 2013, whereas all Democrat states increased theirs.

This spending analysis follows the release of a recent ATR report on state tax changes since the 2010 election, which found that Democrat governors had enacted nearly 60 billion dollars in tax increases since 2011, while Republican governors have cut taxes by $38 billion during that same period.

It seems the term tax and spend liberal isn’t just a cliché. Based on the numbers, if Democrats run your state government, it means, on average, higher taxes and more spending than if Republicans are in charge of state government. 

 

 

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Kay Hagan's Vote for Obamacare May Cost North Carolina over 74,000 jobs


Posted by Patrick M. Gleason on Wednesday, February 5th, 2014, 11:45 AM PERMALINK

Earlier this week, the Congressional Budget Office (CBO) released a report which shows that Obamacare may cost the economy the equivalent of 2.5 million jobs by 2024. That is a lot of lost income and economic growth for the nation. Today, ATR released analysis of the CBO report and Bureau of Labor Statistics data that breaks down the impact by state.

North Carolina, home to one of top 2014 battleground senate races, may lose 74,469 jobs over the next decade thanks to Obamacare. It will certainly be interesting to see Senator Kay Hagan explain how she stands by her vote for Obamacare, even though it will result in the destruction of tens of thousands of jobs across the Tar Heel State.

It will also make for quite the contrast with her likely Republican opponent, North Carolina Speaker Thom Tillis. Hagan’s top legislative achievement in Congress, her vote for Obamacare, includes 20 new or higher taxes and destroy jobs in-state. Standing in stark contrast, Tillis’s top accomplishment in the legislature, the tax reform plan that went into effect last month, is providing tax relief to North Carolinians of all incomes and is widely popular.

Votes matter, and Kay Hagan’s vote for Obamacare is likely to be the central issue of the 2014 North Carolina Senate race. For the full breakdown of Obamacare job losses by state, click here.

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Note to Ed Rendell: Spending Restraint, Not Kidnapping, is the Way to Fund Transportation


Posted by Patrick M. Gleason on Wednesday, February 5th, 2014, 10:02 AM PERMALINK

Yesterday, former Pennsylvania Gov. Ed Rendell made headlines for proposing that the best way to pass higher taxes is to kidnap Americans for Tax Reform president Grover Norquist. The Washington Examiner’s Paul Bedard first reported on Rendell’s remarks, which were made on a Bloomberg Government conference panel that also featured former Transportation Department Secretary Ray LaHood:

Without more money to fix America’s roads, ports and airports, “our backs are against the wall,” said former Pennsylvania Gov. Ed Rendell, the Democratic Party leader from 1999-2001. “What alternative to we have? I mean, kidnap Grover Norquist? What alternative do we have?” he said.

Norquist responded by pointing out that a better approach would be to repeal laws that artificially inflate the cost of transportation projects:

“If I might suggest an alternative to kidnapping me and raising taxes on the American people, Rendell should help ATR repeal costly federal labor mandates that inflate the cost of construction projects,” Norquist told Secrets. “Let’s repeal the Davis-Bacon Act and get rid of Project Labor Agreements which would free up $10 billion annually. You can build a lot of roads with that.”

However, if Rendell wants to know who to blame insufficient transportation funding, he can start by looking in the mirror. During Ed Rendell’s time as governor, the Pennsylvania government spent $417 billion. Had spending growth been limited to the rate of growth in population and inflation, a key metric of fiscal sustainability, Pennsylvania would’ve spent $51 billion less during the Rendell administration.

Simply put, had Rendell governed in a fiscal responsible and sustainable manor, Pennsylvania would have billions in savings to spend on transportation infrastructure upkeep and expansion. This would be a preferable approach from a policy standpoint and, as opposed to kidnapping Grover Norquist, has the advantage of not being a class A felony.

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Despite funding from out of state billionaires, Colorado voters reject massive tax hike


Posted by Patrick M. Gleason on Wednesday, November 6th, 2013, 4:37 PM PERMALINK

While much of the media’s attention has been on the New Jersey and Virginia gubernatorial elections, Americans for Tax Reform (ATR) points to the defeat of Amendment 66 in Colorado, which would have replaced the state’s flat income tax with a progressive system and raised the top rate by a whopping 27 percent, as one of the most important outcomes of the 2013 elections. The measure was rejected by 66.2 percent of voters.

ATR worked in the run up to Tuesday’s election to educate the public on the adverse impact that would’ve resulted from passage of such a massive tax hike, especially at a time when other states are moving in the opposite direction, lowering and flattening taxes. ATR’s analysis of IRS data last month showed that, in addition to taking more money from individuals and families, Amendment 66 would’ve raised taxes on over half a million small businesses in Colorado, greatly reducing their job-creating capacity.

This is just the latest failed effort to tax “the rich.”  In 2010, a ballot measure that would have imposed a state income tax for the first time ever in blue Washington state and only been applied to the wealthiest one percent of Washington residents was also overwhelmingly defeated by a 2-1 margin.

Despite millions of dollars coming in from out-of-state billionaires like Bill Gates and Michael Bloomberg in support of this job-killing tax hike, Colorado voters overwhelmingly rejected Amendment 66 by a 2-1 margin. This shows that even in Democrat-run states like Colorado, voters have no tolerance for higher state taxes on top of the more than 20 tax hikes that President Obama has signed into law in recent years. 

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Americans for Tax Reform Urges Colorado Voters to Reject Amendment 66


Posted by Patrick M. Gleason on Monday, November 4th, 2013, 10:20 PM PERMALINK

In a matter of hours, Colorado voters will head to the polls to decide the fate of Amendment 66, the controversial ballot measure that would, if approved, scrap Colorado’s 4.63% flat income tax and replace it with a progressive system that would have the state taking 5% of income earned by households making less than $75,000 and 5.9% of all incomes in excess of that. This 27% increase in the top state income tax rate would siphon approximately $1 billion from the Colorado economy every year.

By adversely affecting those employers responsible for the majority of job creation in the state, Amendment 66 would be detrimental to Colorado's economic health. As ATR pointed out in an analysis of IRS data last month, over half a million Colorado small businesses file under the individual income tax system and would see their taxes go up and their job-creating capacity significantly reduced if Amendment 66 is approved.

Proponents of Amendment 66 portray it as a tax increase on the rich. Yet a recent report by the non-partisan Tax Foundation found that this massive tax hike would hit lower and middle-income families particularly hard. A taxpayer earning $50,000 annually would pay nearly $110 more in taxes per year, which is the average monthly cost of heating a home in Colorado during the state’s cold winter months.

With individuals, families, and employers across Colorado struggling to cope with the disastrous rollout of Obamacare, along with the more than 20 tax hikes President Obama has signed into law in just the past five years, the last thing that they need is a massive increase in their state tax burden.

ATR urges Colorado voters to reject Amendment 66

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Amendment 66 would hurt small businesses across Colorado


Posted by Patrick M. Gleason on Tuesday, October 8th, 2013, 6:05 AM PERMALINK

How the federal government shutdown and debt ceiling standoff in Washington will conclude is anyone’s guess, but one thing is certain; taxes won’t increase as part of whatever deal is worked out. So, most Americans can rest assured that their taxes won’t be going up in the near future, with the exception of folks who live in Colorado.

In just a few short weeks, Colorado voters will head to the polls to decide whether to raise the state income tax. Amendment 66, which will appear on the Nov. 5th ballot, would, if approved by voters, raise the state income tax, which currently sits at a flat 4.63 percent, to 5 percent on income below $75,000 and 5.9 on incomes above that amount.

Amendment 66 represents a 27 percent increase in the top income tax rate in Colorado and its supporters portray it as a tax increase on the wealthy. However, not only would Amendment 66 raise taxes on all workers, starting at dollar one, this tax increase would also be borne by Colorado small businesses.

According to IRS data, 417,698 small businesses in Colorado filed under the individual income tax system in 2011 (the most recent year for which data is available). However, this figure only accounts for sole proprietors. When factoring in S-Corps & partnerships that also pay the individual income tax, an upwards of approximately 550,000 Colorado small businesses would see their taxes go up and their job-creating capacity significantly reduced if Amendment 66 is approved.

In light of this, it’s not surprising that a recent NFIB poll of Colorado small businesses found that 96 percent were opposed to Amendment 66. Tax Foundation economist Liz Malm explains how Amendment 66 would raise taxes on engine of economic growth and job creation in Colorado:

“A majority of firms within Colorado are what we call "pass-throughs" because their business income tax is ‘passed through’ to individual owner, rather than paid by the actual business entity itself. According to a 2011 Ernst and Young study, 95 percent of firms in Colorado are pass-throughs. Amendment 66 would raise taxes on all of them.”

Small businesses in Colorado and across the U.S. just saw their taxes go up on January 1st of this year with the expiration of Bush era tax rates. After that and the more than 20 new or higher federal taxes signed into law by President Obama in just the last five years, the last thing Colorado employers need is another massive tax increase at the state level. Yesterday, the Denver-based Independence Institute released a report detailing how a 27 percent income tax hike would harm the Colorado economy and do nothing to improve public education.

Americans for Tax Reform urges Colorado voters to reject Amendment 66 and will be working over the next month to educate the public on the adverse consequences that would result from its passage.

 

 

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North Carolina Gov. Pat McCrory Signs Historic Tax Reform into Law


Posted by Patrick M. Gleason on Tuesday, July 23rd, 2013, 10:06 AM PERMALINK

While the chattering classes discuss whether tax reform can happen in Washington, legislators in the Tar Heel State are showing lawmakers on Capitol Hill how it's done. This afternoon, North Carolina Gov. Pat McCrory (R) will sign into law a historic overhaul of the North Carolina tax code. The final deal moves the state from a tiered personal income tax with a top rate of 7.75 percent, the highest in the South, to a flat 5.75 percent over two years. The plan also reduces the corporate tax from 6.9 percent to 5 percent over two years. If certain revenue targets are met, the corporate rate will fall to as low as three percent by 2017.

The final deal, which the North Carolina legislature passed last week, is the result of more than a year of planning and months of negotiations. North Carolina currently has one of the worst business tax climates in the nation; after Gov. McCrory signs this tax overhaul into law today, the state will have one of the best.

Americans for Tax Reform and other supporters of the plan contend that this tax overhaul will boost economic growth and make the state more attractive to employers and investors. Currently, North Carolina has the highest unemployment rate in the region.

“For decades in North Carolina, taxes only went in one direction: up,” said Grover Norquist, president of Americans for Tax Refrom. “Fortunately for North Carolina taxpayers, the state is under new management and, as this pro-growth tax plan demonstrates, open for business again. North Carolina lawmakers will head home from Raleigh this Summer having delivered on one of their top campaign promises. Members of Congress and national pundits continue to debate the prospects for tax reform in Washington, I commend North Carolina lawmakers for demonstrating what pro-growth tax reform looks like.

Already we are seeing officials in other states point to North Carolina's tax reform as a model. New Jersey Senate Republican Leader Tom Kean Jr. made the follwing remarks the same day the North Carolina tax reform act was approved by the legislature last week:

“Tax cuts and rate overhauls authored by state leaders in North Carolina mirror proposals created by Senate Republicans and Gov. Chris Christie to make New Jersey more affordable for families and attractive to job creators...If Senate Democrats continue to block tax cuts and legislation sponsored by Republicans and Democrats, then New Jersey can expect to endure a continuation of outmigration that is splitting up families and chasing innovators away to our competition states, namely North Carolina, which has significantly lower business and personal tax rates.”

Below is a breakdown of the tax changes and how this reform will change in North Carolina's business tax climate ranking:

Individual Income Tax

  • Flatten and lower rate to 5.75 percent by 2015;
  • Increase standard deduction to $7,500 (for singles);
  • Allow full deductibility of charitable contributions;
  • Fully exempt Social Security income from state income tax;
  • Allow for certain itemized deductions (total of mortgage interest and property taxes paid would be capped at $20k); and
  • Retain current child credit of $100 for those earning $40k and increase credit to $125 for those earning under $40k.

Corporate Income Tax

  • Reduce rate to 5 percent by 2015;
  • If certain revenue targets are met, rate would decrease to 4 percent in 2016 and 3 percent in 2017.

Other Changes

  • Retain full sales tax refund for nonprofits;
  • Cap gasoline tax; and
  • Fully repeal estate tax

The plan would improve North Carolina’s State Business Tax Climate Index score. Currently, North Carolina ranks 44th in the country. The new agreement would move the Tar Heel State up to 17th best. Scores for other tax categories are found below:

 

Current Law

New Plan

Overall

44

17

Corporate Income

29

17

Individual Income

43

17

Sales

47

47

Unemployment Insurance

5

5

Property

36

27

 

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Tax Reform Deal Reached in North Carolina


Posted by Patrick M. Gleason on Monday, July 15th, 2013, 6:26 PM PERMALINK

This afternoon, North Carolina Gov. Pat McCrory (R), standing alongside Senate President Pro Tem Phil Berger (R) and Speaker Thom Tillis (R), announced that he and legislative leaders have reached a final agreement on a historic overhaul of the North Carolina tax code. The final deal moves the state from a tiered personal income tax with a top rate of 7.75 percent to a flat 5.75 percent over two years. The plan also reduces the corporate tax from 6.9 percent to 5 percent over two years. If certain revenue targets are met, the corporate rate will fall to as low as three percent by 2017.

The final deal, which the legislature is set to pass and send to the governor later this week, is the result of more than a year of planning and months of negotiations. North Carolina currently has one of the worst business tax climates in the nation; after Gov. McCrory signs this tax overhaul into law, the state will have one of the best.

“North Carolina voters made a decision last November to elect a more taxpayer-friendly and economically-literate state government. Today that decision is paying dividends, with the announcement this afternoon that Gov. McCrory and leadership in the General Assembly have reached a final agreement on a plan that will provide significant and much-needed tax relief for individuals, families, and employers across North Carolina,” said Grover Norquist, president of Americans for Tax Reform. “The compromise plan presented by Gov. McCrory, Speaker Tillis, and Senate President Berger today represents a huge improvement over the current tax code. Thanks to hard work by members of the legislature and their staffs, North Carolina will no longer have the highest income taxes in the South after the legislature adjourns later this month.”

Americans for Tax Reform and other supporters of the plan contend that this tax overhaul will boost economic growth and make the state more attractive to employers and investors. Currently, North Carolina has the highest unemployment rate in the region.

“For decades in North Carolina, taxes only went in one direction: up,” continued Norquist. “Fortunately for North Carolina taxpayers, the state is under new management and, as this pro-growth tax plan demonstrates, open for business again. North Carolina lawmakers will head home from Raleigh this Summer having delivered on one of their top campaign promises. Members of Congress and national pundits continue to debate the prospects for tax reform in Washington, I commend North Carolina lawmakers for demonstrating what pro-growth tax reform looks like.

Below is a breakdown of the tax changes implemented by this plan, as well as the change in North Carolina's business tax climate ranking as a result of the deal: 

Individual Income Tax

  • Flatten and lower rate to 5.75 percent by 2015;
  • Increase standard deduction to $7,500 (for singles);
  • Allow full deductibility of charitable contributions;
  • Fully exempt Social Security income from state income tax;
  • Allow for certain itemized deductions (total of mortgage interest and property taxes paid would be capped at $20k); and
  • Retain current child credit of $100 for those earning $40k and increase credit to $125 for those earning under $40k.

Corporate Income Tax

  • Reduce rate to 5 percent by 2015;
  • If certain revenue targets are met, rate would decrease to 4 percent in 2016 and 3 percent in 2017.

Other Changes

  • Retain full sales tax refund for nonprofits;
  • Cap gasoline tax; and
  • Fully repeal estate tax

The plan would most definitely improve North Carolina’s State Business Tax Climate Index score. Currently, North Carolina ranks 44th in the country. The new agreement would move the Tar Heel State up to 17th best. Scores for other tax categories are found below:

 

Current Law

New Plan

Overall

44

17

Corporate Income

29

17

Individual Income

43

17

Sales

47

47

Unemployment Insurance

5

5

Property

36

27

 

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Opponents of Tax Reform in NC Not Making Much Sense


Posted by Patrick M. Gleason on Thursday, July 11th, 2013, 1:07 PM PERMALINK

The temperature and rhetoric in Raleigh is heating up as the 2013 session of the North Carolina General Assembly hits the home stretch. As lawmakers get close to finalizing a tax relief package, opponents of tax reform appear to be getting desperate, so much so that their arguments are getting more incoherent by the day. Take the News & Observer’s Chief Political Writer Rob Christensen, a vocal critic of the tax reform plans passed by the House and Senate. Christensen penned a column last week attempting to discredit the Tax Foundation’s Business Tax Climate Index, which has been cited frequently by Republicans making the case for tax reform. Here's Christensen's critique:

“So what is the Shangri-La that North Carolina is now searching for?

Wyoming, a state with about the same number of people as Raleigh and Cary.

The Tax Foundation considers it the perfect state as far as taxes. Rounding out its top five of the lowest tax states for business are South Dakota Nevada, Alaska, and Florida.

And what are the states North Carolina is trying to avoid? The worst state, according to the Tax Foundation, is New York, followed by New Jersey, California, Vermont and Rhode Island.

Now you may have varying ideas about those states. But few people would argue that Wyoming, South Dakota and Nevada are the nation’s economic engines and that New York, New Jersey and California are the nation’s economic backwaters.”

Other than his personal preferences for certain states over others, Christensen offers no empirical or methodological critique of the Tax Foundation’s state business tax climate index, which ATR frequently cites. As it would happen, a look a Bureau of Economic Analysis data shows that the economies of the states that score the best on the Tax Foundation’s index and that Christensen derides for no apparent reason– WY, SD, NV, FL, and UT – grew by 66.9% on average in the ten years from 2002 to 2012. Meanwhile, the five states ranked as having the worst business tax climates – NY, NJ, VT, CA, and RI – saw average economic growth of only 39.7%.

Over the last decade, economic expansion in the five states with the most hospitable tax climates outpaced the five least welcoming by 68%, which is significant. Furthermore, the average unemployment rate amongst five states with the worst business tax climate is 7.5, while the five states that score the best on the Tax Foundation's index have a far lower average unemployment rate of 5.9%, well below the national average. Mr. Christensen might not personally want to live in WY, SD, NV, FL, or UT, but it’s clear that they are doing something right when it comes to tax policy and are outperforming the bottom five states on the Tax Foundation’s index. Left-leaning members of the media might thumb their noses at states they don’t consider to be hip or cosmopolitan, but a look at the facts indicates a tax code overhaul that left North Carolina with a more competitive business tax climate, as both the House and Senate plans would do, would be good for the state economy.

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