Patrick M. Gleason

DC City Council Doing What They Do Best - Trying to Raise Taxes

Posted by Patrick M. Gleason on Friday, May 14th, 2010, 6:12 PM PERMALINK

Within the past year DC residents have faced tax hikes on their smokes, plastic bags, and now it looks like the DC Council is after their Coca-Cola too. Yes, Council member Mary M. Cheh (D-Ward 3) has proposed a 1-cent-per-ounce tax on bottled and canned soda along with other sugary drinks to pay for her healthy schools initiative. If Cheh’s proposal is successful, beverages classified as soda or sugary drinks would cost $0.68 more per 2-liter and $1.44 more per 12 pack – a more than 30% tax increase in some instances! The council is slated to take a final vote on the issue on May 25 as part of their fiscal 2011 budget.

As the No DC Beverage Tax coalition points out, regressive soda taxes hit hardest those that are least able to afford it. Furthermore, heavily taxed DC residents already work an average of 224 days a year before they have earned enough gross income to pay their share of the spending and regulatory burden imposed by government on the federal and local levels. This also comes at a time when DC taxpayers and employers are trying to cope with the $670 billion in higher taxes passed by Congress in just the past year. Adding another punitive soda tax will only make matters worse. Instead of trying to raise taxes, the Council should first try to identify and cut areas of waste, fraud, and abuse. A good place to start is DC Council members' exorbitant salaries. In fact, ATR has already pointed out how Cheh could actually fund her healthy schools initiative by cutting taxes.

ATR urges that you make your voice heard today – to sign the petition expressing opposition to Cheh's soda tax, Click Here.

More from Americans for Tax Reform

Governor Mark Sanford Vetoes Tobacco Tax Increase

Posted by Patrick M. Gleason on Tuesday, May 11th, 2010, 4:05 PM PERMALINK

Americans for Tax Reform applauds South Carolina Governor Mark Sanford for announcing his veto today of House Bill 3584, legislation that would impose a more than 700% increase on cigarettes sold in the Palmetto State.

While announcing his veto of what would be the largest tax increase in South Carolina in over a quarter-century, Sanford made clear that he considers calls for higher taxes to be a non-starter in the current economy and that the problem lies in state overspending, not a lack of tax revenue.

In fact, while the unemployment rate doubled during the last two years and families across the state were cutting back and prioritizing, state spending has continued to increase.

Sanford’s principled insistence that any increase in the state cigarette tax be offset with corresponding tax relief also serves to illustrate the hypocrisy of tobacco tax hike proponents, who insist that their dogged push for higher taxes is done for the sake of the children and to improve public health. Yet, Sanford has made it clear for years that he would go along with a tobacco tax increase, provided that it wasn’t a tool to raise revenue and fund unsustainable state spending. However, HB 3584 proponents’ refusal to craft the bill in a revenue neutral manner demonstrates that cheerleaders for higher cigarette taxes aren’t in this “for the children” and that the ultimate goal is simply more money for government coffers.

ATR commends Gov. Sanford for wielding his veto pen in defense of South Carolina taxpayers and employers. A two-thirds vote of the legislature is required to overturn Sanford’s veto. ATR is reaching out and urging all South Carolina legislators to sustain Sanford’s veto.

For the Governor's statement on the veto, Click Here

Former Congressman Nathan Deal Signs Gubernatorial Taxpayer Protection Pledge

Posted by Patrick M. Gleason on Monday, May 10th, 2010, 7:16 PM PERMALINK

Today former Congressman Nathan Deal, a Republican running to be the next governor of Georgia, signed the gubernatorial Taxpayer Protection Pledge sponsored by Americans for Tax Reform (ATR). The gubernatorial Pledge is a commitment to constituents to “oppose and veto any and all efforts to increase taxes.”

Currently, 19 Georgia State Senators and 51 State Representatives have signed the Taxpayer Protection Pledge. They join 7 Governors and over 1,100 sitting state legislators across the country who have made this important commitment to taxpayers.

“Georgians need leaders committed to fiscal responsibility and pro-growth economic policies. Nathan Deal has long stood on the side of the taxpayers on the Federal level and I commend him for signaling his intent to continue this commitment to the people of Georgia by signing the Taxpayer Protection Pledge in his bid for governor,”said Grover Norquist, president of ATR.

Others who have signed the Taxpayer Protection Pledge in Georgia's gubernatorial race include Sen. Jeff Chapman, former Secretary of State Karen Handel, former Senator Eric Johnson, and Insurance Commissioner John Oxendine.

“With politicians in Washington having raised taxes by hundreds of billions of dollars in just the past year, now more than ever it is important for Georgians to elect leaders who will not pile on with further economically adverse tax increases at the state level. In signing the Pledge, Nathan Deal makes clear that he recognizes this,” added Norquist.“I strongly encourage every candidate for elected office in Georgia to sign the Taxpayer Protection Pledge.

More from Americans for Tax Reform

What Budget Crisis? California Wants to Ban Shopping Bags

Posted by Patrick M. Gleason on Tuesday, May 4th, 2010, 5:35 PM PERMALINK

The following article was originally posted at

Greece is the fiscally-dysfunctional member of the European Union. On this side of the pond we have California. Illustrating just how bleak the situation is on the Left coast, it was recently reported in the London Telegraph that at JP Morgan Chase’s annual meeting, the banking behemoth’s chairman Jamie Dimon warned that investors should be more concerned about California defaulting than Greece.

In the face of such dire warnings, a $20 billion budget deficit, and the lowest credit rating among all states, one might think righting the state’s financial ship would be the primary focus of legislators in Sacramento, and one would be very wrong to think so.

For a concrete example of just how Golden State legislators are fiddling while Rome burns, take Assembly Bill 1998, now sitting in the California Assembly Committee on Appropriations and scheduled for a hearing on Wednesday. Introduced by Assemblywoman Julia Brownley of Santa Monica, AB 1998 would ban all plastic and paper bags currently provided to customers at grocery stores, pharmacies, convenience stores, and other retailers statewide.

To continue reading, Click Here.

More from Americans for Tax Reform

Pennsylvania Department of Revenue Report Brings More Bad News

Posted by Patrick M. Gleason on Tuesday, May 4th, 2010, 9:42 AM PERMALINK

The Commonwealth Foundation has published their monthly deficit watch following the release of the Pennsylvania Department of Revenue’s April collections report and the bottom line is the fiscal situation in the Key Stone State continues to look bleak.

In contradiction to recent assertions from the Rendell administration, revenue came in under below estimates in April, as it has for all 10 months of the current fiscal year. The state now finds itself $1 billion in the hole for the current budget and facing ballooning deficits into the future.

Gov. Rendell’s solution, as was the case last year, remains a combination of higher taxes and higher spending. Despite the fact that state revenue continues to decline, Rendell’s new budget calls for a more than billion dollar increase in general fund spending. While there is much disagreement as to whether the economy is on the mend, even assuming the most optimistic of scenarios, Rendell’s spending plan ignores the fact that recovery in state tax collections tends to lag behind that of the economy.

Rendell’s budget includes a $1.3 billion sales tax increase over the next two years through base expansion. Additionally, Rendell, is continuing his push for tax on natural gas production, which, as ATR has pointed out since last year, will dampen the economic potential of the Marcellus Shale.

The Governor’s budget, as with his previous budgets, continues to spend too much, tax too much, and appears to have been crafted ignorant of the fact that tax revenue continues to decline, the state’s current tax climate is hostile to employers, and unemployment is nearing double digits. MSNBC likes to trot Gov. Rendell out from time to time to criticize the GOP and it’s entertaining to watch because he always just mumbles incoherently about how Republicans are “out of touch.” Yet, looking at Rendell’s budget, one would be hard pressed to find a state with a more economically out of touch chief executive at the helm (OK David Paterson might give him a run for his money). Furthermore, an administration has to be pretty out of touch to not understand how this Orwellian ad would creep out most Americans:

As Rendell concludes his final year in office – leaving the state rainy day fund depleted, massive projected deficits well into the future, and an impending pension bomb to deal with – he follows in a tradition epitomized by his Democratic counterparts such as Janet Napolitano and John Corzine of leaving the state in fiscal shambles.

More from Americans for Tax Reform

Philadelphia City Council Hearing on Tobacco Tax Hike Postponed

Posted by Patrick M. Gleason on Monday, May 3rd, 2010, 5:29 PM PERMALINK

A Philadelphia City Council hearing on legislation that would impose a new excise tax on smokeless tobacco products, cigars, and other tobacco-related products, originally scheduled for today, has been postponed.

The proposal to impose a local excise tax on smokeless and other tobacco products was introduced by Councilman Darrell Clarke in April, at the same time that support for Mayor Nutter’s soda tax and trash fee proposals began deteriorating. Clarke’s bill would tax cigars at 3.6 cents per ounce and would tax smokeless and pipe tobacco at a rate of 36 cents per ounce. This measure is an ineffective and misguided approach to addressing the serious fiscal challenges facing what is already the most highly taxed city in the U.S.

The $6 million that proponents estimate the new tobacco tax would generate amounts to less than half of one percent of the city’s projected $150 million deficit. Projections that Clarke’s new tobacco tax will generate even this paltry sum are based in large part on that which catapulted our current president into the White House: Hope. As DC officials discovered last month, tax increases on tobacco products have a poor history of meeting revenue projections, especially in locales surrounded by lower tax cities, towns and states, as is the case with Philadelphia.

The Philadelphia City Council put city retailers at a competitive disadvantage just last year when they increased sales tax paid in city limits by more than 14 percent. With the city’s sales tax now a third higher than surrounding suburbs, there is already plenty of incentive, especially for those that commute into the city to work, to make their purchases elsewhere.

Councilman Clarke’s attempt to impose a new discriminatory tax on cigars and smokeless tobacco products will only exacerbate this incentive to avoid Philadelphia’s onerous tax burden, to the detriment of city coffers and small businesses. Fortunately, unlike last year, voters will have the opportunity in a few short months to hold accountable those lawmakers who vote for more unnecessary and ineffective tax increases in the middle of an economic downturn.

The Philadelphia City Council’s hearing on Clarke’s tobacco tax bill has been rescheduled for May 13 at noon.

More from Americans for Tax Reform

ATR Applauds Governor Lingle's Energy Tax Veto

Posted by Patrick M. Gleason on Wednesday, April 28th, 2010, 6:05 PM PERMALINK

Kudos to Hawaii Gov. Linda Lingle for proving her pen can be mightier than her tax and spend legislature with her veto of HB 2421, legislation that would have imposed a 2000% tax increase on petroleum products.

Proponents of this massive energy tax hike employed that tired strategy centered mostly around the demonization of energy companies – you know – those entities that maintain our way of life and facilitate economic growth. Gov. Lingle, in vetoing this energy tax increase, demonstrates that she, unlike her legislature, understands that businesses don’t pay taxes, people do and that a massive tax hike on oil would lead to higher energy prices and utility bills for Hawaiians.

However, it remains to be seen if Lingle’s veto is enough to stave of yet another tax increase in the Aloha State. The legislature is expected to take up a veto override vote tomorrow and they certainly have the votes to do so. Legislative Democrats, who handily control the Hawaii Senate 23-2 and the House 45-5, can pretty much do whatever they want and their answer to nearly every single fiscal challenge facing the state is simple and consistent – higher taxes.

Last year the legislature, overriding vetoes from Lingle, enacted higher taxes on income, property, and tobacco products. Hawaiians pay the highest state income tax rate in the country and have the 5th highest tax burden among states. To add insult to injury, Harry Reid and Pelosi have piled on with $670 billion in higher taxes in just the past year. If Hawaiian Democrats can’t hold off of raising taxes in such an environment, they never will. While ATR is urging the legislature to sustain Lingle’s veto, the legislature’s track record leaves little room for optimism. Fortunately for Hawaii taxpayers, November is fast approaching. If there is any state house in the country that could use a makeover, it’s Hawaii’s.

More from Americans for Tax Reform

South Carolina Senate Talking Tax Hikes

Posted by Patrick M. Gleason on Thursday, April 1st, 2010, 1:34 PM PERMALINK

The two chambers of the South Carolina legislature are in the midst of a little game of who can out tax who. While this is April Fools Day, the measures being debated in Columbia are no joke to Palmetto State taxpayers.

A few weeks ago the SC House passed a budget which included a 30 cent per pack, 428% tax hike on cigarettes. Some South Carolina House members did not want their vote for higher taxes in the midst of an economic downturn on record, so the portion of the state budget that included the tobacco tax hike was voted on anonymously. I know, talk about infinite courage and transparency.

Rep. Joey Millwood (R-Spartanburg), to his credit, held his colleagues accountable by offering an amendment to remove the cigarette tax hike. While the amendment was subsequently defeated 106-12, it at least forced the tax hikers to stand up and be counted. This will come in very handy in November.

The Senate, which is working on the budget this week has decided to do the House one better and is taking up the 50 cent per pack, 714% hike that was passed by the House last year but subsequently stalled in the Senate. For a list of all Senators that have signed the Taxpayer Protection Pledge, and will have violated their central campaign promise to voters with an “aye” vote, click here.

Need further proof that many of these Republican legislators are not as conservative or fiscally responsible as they claim? Keep in mind that this tobacco tax hike is also an effort to draw down more federal matching funds in order to put off addressing the state’s over spending problem. Let me be clear (as Obama would say), no South Carolina legislator that votes in favor of making their state more dependant on a federal government that is over $12 trillion in debt can fancy themselves fiscally conservative.

More from Americans for Tax Reform

Taxpayer Protection Pledge a Deciding Factor in Arizona Gubernatorial Race

Posted by Patrick M. Gleason on Thursday, March 25th, 2010, 6:02 PM PERMALINK

Rasmussen Reports recently released the results of a poll conducted in Arizona earlier this month. The poll found that Gov. Jan Brewer’s push for higher taxes in the Grand Canyon State has hampered her chances for re-election.

The Rasmussen poll found the Democrats’ presumptive gubernatorial nominee, Attorney General Terry Goddard, leading Gov. Brewer 45% to 36%. However, Gov. Brewer is facing stiff competition in the Republican primary from state Treasurer Dean Martin and successful entrepreneur and businessman Buz Mills. Unlike Brewer, Rasmussmen found both Martin and Mills leading Goddard in head-to-head polls by no less than five points.

It should be noted that Mills and Martin are the only candidates in the race to sign the Taxpayer Protection Pledge, a commitment to voters that they will oppose and veto any and all tax increases. Additionally, Mills and Martin have joined Sen. McCain, Sen. Kyl, and Rep. Flake in stating their opposition to Gov. Brewer's $3 billion sales tax increase.

It is clear that Gov. Brewer signed the Taxpayer Protection Pledge in her previous gig as Secretary of State for reasons of political expediency, knowing that as Secretary of State she would never be put in a position to uphold this principled commitment. Upon her ascension to the governorship a little over a year ago she discarded her Pledge and proceeded to push a massive tax increase in the midst of an economic downturn as her flagship policy initiative.

Facing a tsunami of higher taxes from Washington as a result of the recently passed health care bill and the pending expiration of 2001 and 2003 tax cuts, Arizona voters are looking for candidates who will stand up for their economic interests and reign in the unsustainable growth of government.

By signing the Taxpayer Protection Pledge, Martin and Mills have made clear that they will stand up against the spending interests and protect taxpayers. It is no coincidence that they are also leading in the polls.

More from Americans for Tax Reform

Real Men of Genius - DC City Council Edition: Cigarette Tax Hike Reduces Revenue

Posted by Patrick M. Gleason on Thursday, February 25th, 2010, 10:58 AM PERMALINK

Yesterday Washington, DC's Chief Financial Officer, Natwar Gandhi, sent a letter to Mayor Fenty informing him that new estimates show revenues in the current budget to be $17 million shy of initial projections. A big reason for the downward revision: the recent cigarette tax increase.

DC City Council members raised DC's cigarette excise tax 50 cents last year, bringing the rate to $2.50 per pack. The council members, in their infinite wisdom, failed to consider the effect that would be had by raising the District's cigarette tax rate 25% higher than neighboring Maryland and a whopping 733% higher than is levied across the river in Virginia.

It gets better. Not only do new estimates show the tax hike will bring in $15 million less than was originally projected, cigarette tax revenue is expected to actually be $7.6 million less than pre-hike levels.In his letter to Fenty, Gandhi noted:

"future increases in the tax rate will likely generate less revenue."

The Campaign for Tobacco Free Kids recently published a report claiming that a dollar per pack increase in cigarette excise taxes would raise revenue in every state, including Washington, DC. DC's budget revisions and Gandhi's conclusions show that claim to be false and should call the entire report into question.

Lawmakers in Georgia and South Carolina, where cigarette tax hikes are currently under consideration, would be wise to learn from Washington's mistake, which yet again proves that cigarette tax hikes are bad policy and a dubious source of revenue. Furthermore, cigarette tax increases serve as nothing more than a place holder for future tax increases on income, property, sales, and other goods and services.

Other examples of failed cigarette tax hikes are abound:

~ New Jersey raised the cigarette tax 17.5 cents in 2007.  They collected $52 million less than they had projected and $22 million below what they collected before the tax hike.

~ After Maryland raised the cigarette tax $1 in 2007, sales dropped by 25% and there was a 254% increase in cigarettes illegally crossing state lines.

~ Arkansas passed a 56-cent tax hike on cigarettes in February 2009.  On the heels of the federal cigarette tax increase, the bill was estimated to bring in $86 million, but the projection was lowered to $72 million just one month after passage.  Then, in December, the Department of Finance and Administration predicted a $10.3 million drop in tobacco tax collections.

~ Mississippi raised the cigarette tax by 50-cents in May 2009.  The hike was expected to raise $113 million in the first year, but by August projections were already off by $4.7 million.

~ Rhode Island raised the cigarette tax by $1 to $3.46 per pack last year. By November revenue projections were down by $7.7 million. 

More from Americans for Tax Reform