Sven Werner

Tennessee Lawmakers Considering Step by Step Elimination of Hall Tax

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Posted by Sven Werner on Monday, April 6th, 2015, 4:30 PM PERMALINK

Tennessee legislators are considering legislation bill, Senate Bill 47,that would repeal the Hall Tax, the state’s six percent tax on investment income. The Tennessee Senate Finance Committee will hold a hearing on SB 47 this week. SB 47 would get rid of the Hall Tax, step by step, reducing it by 1 percent every year that state revenue growth exceeds three percent. The Hall Tax only makes up one percent of state and local tax revenue, meaning that, with economic growth, modest spending restraint, or a combination of the two, lawmakers can easily cope with the Hall Tax’s elimination.

Below is a copy of the letter ATR sent to Tennessee senators, urging them to make Tennessee a true no-income tax state by passing SB 47:

To: Members of the Tennessee Senate Finance Committee

 Re: SB 47

 On behalf of Americans for Tax Reform and our supporters across Tennessee, I urge you to use the 2015 session to pass legislation that protects Tennessee taxpayers and fosters economic growth. After being hit with over 20 federal tax increases in recent years, it is imperative that state lawmakers stand up for Tennessee taxpayers. The best thing lawmakers can do for Tennessee taxpayers and the state economy is pass Senate Bill 47, legislation that will repeal the Hall Tax, the state’s six percent tax on investment income. I urge you to support SB 47 when it comes before the Finance Committee.

The six percent Hall Tax on dividend an interest income is a form of double taxation that hurts seniors and discourages investment in Tennessee. A tax on investment income, such as the Hall Tax, is one of the most economically damaging forms of taxation. The Hall Tax is preventing Tennessee from realizing its full growth potential and should be done away with. SB 47 gets rid of the Hall Tax in a responsible and cautious manner, reducing the Hall Tax by a percentage point every year that state revenue growth exceeds three percent. The Hall Tax does far more damage than it’s worth, raising what amounts to less than one percent of state and local revenue. With economic growth, modest spending restraint, or a combination of the two, lawmakers can easily cope with the Hall Tax’s elimination.

Tax relief isn’t just good politics, it’s good policy. The non-partisan Tax Foundation released analysis showing how elimination of the Hall Tax would boost Tennessee’s economic competitiveness. Tennessee currently has the 15th best business tax climate in the nation. However, if lawmakers repeal the state’s tax on investment income, Tennessee would have the 11th best business tax climate in the nation.

Tax Foundation economist William McBride reviewed academic literature going back three decades and found "while there are a variety of methods and data sources, 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." John Hood, chairman of the John Locke Foundation, analyzed 681 peer-reviewed academic journal articles going back to 1990 and found that keeping state and local tax and regulatory burdens as low as possible promotes economic growth. "Most studies find," Hood discovered, "that lower levels of taxes and spending, less-intrusive regulation correlate with stronger economic performance."

Tennessee has lower taxes than most states, but that doesn’t mean lawmakers should rest on their laurels, as other states in the region and across the country continue to propose and enact reforms that make their tax codes more competitive. As such, I urge you to use the 2015 session to make Tennessee a true no-income-tax state by beginning to phase out the Hall Tax. Americans for Tax Reform will continue to follow this issue closely throughout the session and will be educating your constituents as to how you vote on this important matter. If you have any questions, please contact Patrick Gleason, ATR’s director of state affairs, at (202) 785-0266 or pgleason@atr.org.

Onward,​

Grover G. Norquist

President, Americans for Tax Reform

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New Mexico Closing in On Civil Asset Forfeiture Reform

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Posted by Sven Werner, Jorge Marin on Tuesday, March 31st, 2015, 11:07 AM PERMALINK

On March 30, 2015, Americans for Tax Reform sent a letter to New Mexico Governor Susana Martinez urging her to sign HB 560 into law. The Land of Enchantment is on its way to becoming a role model for reforming the nation’s broken civil asset forfeiture laws. HB 560 would transfer funds obtained through civil asset forfeiture into the state’s general fund and require a criminal conviction in order to confiscate your property.

The bill passed the state legislature unanimously and is waiting to be signed by Gov. Martinez. These changes would bolster the credibility of law enforcement with their local communities, in addition to assuring law-abiding citizens that there is no danger of their property being confiscated. The following is the text of the letter sent to Governor Martinez:

 

March 30, 2015

Dear Governor Martinez,

I write to you today in strong support of HB 560, a bill passed on March 21 that reforms the state’s civil asset forfeiture laws. The bill would transfer funds obtained through civil asset forfeiture into the state’s general fund. Additionally, under the new rules, a criminal conviction would be required to confiscate property under civil asset forfeiture. It is my view that you would be doing New Mexico a service by signing the bill into law.

Having passed all committees and subcommittees unanimously, HB 560 enjoys strong support from both sides of the isle. These votes from the State legislature show the far-reaching appeal of reform, but it isn’t limited to the Senate and House, in fact, according to Rasmussen, 70% of Americans believe that you should be convicted of a crime in order for the police to seize your property.

We ask that you help put an end to a regime that allows authorities to take and keep property from individuals not charged with a crime. By signing the bill, civil asset forfeiture is changed into criminal asset forfeiture; thereby ensuring that criminals, not law-abiding civilians, pay the price for broken laws.

This new regime takes into account the need to punish law-breakers and the rights of citizens. Simply put, criminals should not enjoy the fruits of their bad behavior, and by requiring proof of wrongdoing we ensure that those who break the law pay up.

Moreover, the proposed reforms serve to bolster the credibility of law enforcement with their local communities. If law-abiding civilians are assured that there is no danger of their property being confiscated, confidence in the rule of law will be strengthened and officers will find it easier to gain the cooperation of their communities.

Reforming civil asset forfeiture is a major issue for voters across the United States. By acting now, New Mexico stands to be in the vanguard of states bent on modernizing police practices. Law enforcement should not have to be seen by the public as opportunistic profiteers, this HB 560 ensures the continued safety of civilians, the prosecution of the guilty, and the rule of law in New Mexico.

Sincerely,                               

Grover G. Norquist                                                    

President                                                                   

Americans for Tax Reform                                        

 

 

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Indiana Legislators Considering 911 Tax Increase

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Posted by Sven Werner on Monday, March 23rd, 2015, 5:42 PM PERMALINK

Indiana state senators are considering legislation, HB 1475, that would double the point of sale 911 tax for prepaid wireless customers, assessing a levy of $1.00 for every retail transaction.  This increased rate would be four times greater than what was paid just two years ago.

If passed, HB 1457, the Indiana 911 Board would get the authority to hike the tax for prepaid wireless customers by 0.10$ without any legislative approval. Below is a copy of the letter that ATR sent to Indiana senators, urging them to oppose HB 1457:

March 19, 2015

Dear Member of the Indiana Senate

On behalf of Americans for Tax Reform and our supporters across Indiana, I urge you to reject House Bill 1475, legislation that would increase taxes and fees on Indiana residents. HB 1475, which will soon come to the Senate floor, would target Indiana residents who utilize pre-paid wireless services and impose drastically increased costs.

HB 1475 would double the point of sale 911 tax for prepaid wireless customers, assessing a levy of $1.00 for every retail transaction. This increased rate would be four times greater than what was paid just two years ago. Worse, HB 1475 would give the Indiana 911 Board authority to hike the 911 tax for prepaid wireless customers another $0.10 without legislative approval. It’s never a good idea to give taxing authority to an unelected body. Under current law, legislative approval is required for any 911 tax increase and it is best for Indiana taxpayers that it stays that way.

HB 1475 also increases the 911 tax on standard billed, postpaid, wireless customers from $0.90 to $1.00. That represents a 10% increase from the current rate and a 100% hike from what the rate was just two years ago. HB 1475 also includes provisions to aid the 911 Board’s goal of taxing low-income Indiana residents who receive federal Lifeline benefits.

Over 20 federal tax increases, along with a host of costly regulations, have been imposed by Washington on Indiana residents in recent years. The last thing Hoosiers need are higher taxes at the state level. As such, I urge you vote “No” on HB 1475. Americans for Tax Reform will continue to follow this issue closely throughout session and will be educating your constituents as to how you vote on this important matter. If you have any questions, please contact Patrick Gleason, ATR’s director of state affairs, at (202) 785-0266 or pgleason@atr.org.

Onward,

Grover G. Norquist

President, Americans for Tax Reform

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Governor Paul LePage’s Plan for Prosperity in Maine

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Posted by Sven Werner, Paul Blair on Monday, March 23rd, 2015, 2:12 PM PERMALINK

Governor Paul LePage (R-Maine) recently announced his plan to place on the ballot a referendum in 2016 to abolish the income tax. His proposed amendment to the Maine Constitution would eliminate the income tax for good, preventing Augusta politicians from re-implementing the income tax in the future via legislative vote.

LePage announced that he would likely set 2020 as the year the income tax repeal would go into effect. If the referendum were successful, Maine would become the tenth state to not tax income, which would help fulfill one of the promises LePage made regarding his two terms in office.

Gov. Le Page recently pitched his budget and the elimination of the income tax at a town hall forum:

“The whole purpose of my budget is to make Maine more prosperous and to give the Maine worker the largest wage increase since the 1960s,” LePage said. “This is better than any minimum wage you can talk about. This will propel the economy for decades.”

According to his new budget, he not only wants to abolish the entire state income tax - which is comprised of two brackets - but also reduce the top tax rate from 7.95 % to 5.75%. His budget also reduces top corporate tax rate from 8.93% to 6.75% while broadening and raising the state sales tax from 5.5% to 6.5%.

The Tax Foundation concluded in their State Business Climate Index, that if all of Le Page’s budget proposals were implemented, Maine would move from being ranked at 33rd to 23rd in the index.

The budget would result in more than $250 million in net tax cuts, independent of the plan to eliminate the income tax.

In 2014, Forbes ranked Maine as second worst state to do business in, something that clearly concerns Gov. LePage. The governor has worked to make the case since his first election 5 years ago that the tax code must be simpler, flatter, and encourage more economic growth. His most recent budget and his plan to place the elimination of the income tax on the ballot further demonstrates his commitment to those principles.

 

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Texas Lawmakers Take on The Reviled Margin Tax

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Posted by Sven Werner, Patrick Gleason on Friday, March 20th, 2015, 4:16 PM PERMALINK

Despite being more progressive from a tax policy standpoint than most states, Texas still has a major flaw in its tax code: a gross receipts tax on employers known as the margin tax. The Texas margin tax is complex, unnecessary and keeps small and mid-size businesses from creating jobs. It even applies to companies who don’t make a profit. The good news is lawmakers are working to fix this problem during the 2015 legislative session. Two bills that would reduce the margin tax’s burden on Texas employers, Senate Bill 7 & Senate Bill 8, were approved by the Texas Senate Finance Committee this week.

SB 7 would, if signed into law, reduce the margin tax by 15 percent. SB8 would raise the exemption from $1 million to $4 million and exempt businesses that owe less than $1,000. While either of these bills would be better than passing nothing, cutting the tax rate is better approach than raising the exemption. The best outcome would be to put the margin tax on a path to elimination. There are six bills pending in the Texas Senate that would ultimately do away with the margin tax.

Texas is currently ranked as the 10th best business tax climate on the non-partisan Tax Foundation’s annual index. By getting rid of the margin tax, Texas would improve to the 3rd best business tax climate in the nation. A Texas Public Policy Foundation Report found that, based on dynamic econometric models, repealing the margin tax would lead to the creation of 129, 200 jobs in the first five years after its elimination.

It’s wise for Texas legislators to use the 2015 legislative session to improve their tax code as much as possible. Other states are working to cut taxes this session, even states with relatively competitive tax codes. One example is Tennessee. Like Texas, Tennessee does not tax worker paychecks. However, Tennessee does tax dividend income. Even though Tennessee has a lower state and local tax burden than Texas and all but three other states Tennessee lawmakers are planning to approve legislation this year to phase out their tax on investment income. With other states working hard to make themselves as attractive as possible to investment and job creation, Texas lawmakers cannot rest on their laurels.

Fortunately it looks like some form of margin tax relief will be approved this year. Texas Gov. Greg Abbott (R) recently declared that he “will reject any budget that does not include genuine tax relief for Texas employers and job creators.” A great way for legislators to send Gov. Abbott what he has requested is to pass legislation to end or at least significantly cut the margin tax.

 

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But who will build the roads? A case for privatization

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Posted by Sven Werner on Friday, March 20th, 2015, 1:05 PM PERMALINK

If a state owned road is closed, why not build your own? That’s exactly what English businessman Mike Watts did. But just how is that possible, without the government?

In August 2014 Watts built a private toll road across a field in a matter of 10 days after the government-controlled road was closed due to a mudslide. To avoid the 14 mile detour on government roads, people were ready to pay a small toll for using the road. Watts spent a total of around 300,000 pounds on the 365 meter road. In the two months, that his toll road was open, and the government road was closed, Watts nearly broke even on his investment. If the English government had been any slower in clearing the mudslide and repairing their road, Watts would have assuredly made a profit.

That the government and the government only, has the special knowledge and abilities to build roads is often a myth peddled by lawmakers and special interests when the suggestion of privatizing transportation comes up. But this is just a myth - one used by those afraid of budget efficiencies and innovation. 

Private toll roads already exist in the US. Former Indiana Gov. Mitch Daniels decided to lease Indiana’s toll road to private developers after Indiana had been losing money on it for years. Because private companies, opposed to the state, have an interest in efficiency and cutting wasteful spending, the private developers implemented electronic tolling. This investment in making the process more efficient led to saving more than 55% on toll collection. And that’s only one example how they figured out how to save money and make the toll road more cost effective.

France, in terms of privately run highways, takes it to a whole other level: 8000 kilometers of 11000 kilometers of highway are under by private concession. More than half of Italy’s highways are run by private companies who implemented electronic tolling in 1998 - unthinkable for state-run highways back then. The customers of the private run highways are billed by the distance they travel on the roads, maximizing the "user pays" philosophy many lawmakers seek when it comes to transportation funding.

These examples emphasize how drivers and taxpayers can benefit from private-run roads and how governments can work with private industry to ensure that transportation is truly funded on a "user pays" basis. 

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Pennsylvanians Facing Historic Tax Increases with Gov. Wolf's New Budget

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Posted by Sven Werner, Patrick Gleason on Wednesday, March 18th, 2015, 3:28 PM PERMALINK

Recently Pennsylvania Gov. Tom Wolf presented his first budget, which includes the largest state tax increase in Pennsylvania history. His budget proposal of $33.6 billion represents a 16 percent increase over last year’s budget.

This increase of the income tax rate would mean a $2.3 billion net increase for Pennsylvania's taxpayers.  According to his budget, the income tax rate will be raised by 20%, from 3.07% to 3.7%. This proposed income tax increase, were it to become law, would have a significant negative effect on Pennsylvania taxpayers.  For a household making $60,000, it would raise their state income tax bill from $1,842 to $2,220, or an increase of $378.

Gov. Wolf’s budget proposal is historic, and not in a good way, as his proposed $4.5 billion state tax increase would be the largest increase in Pennsylvania history. Gov. Wolf uses these tax increases to increase spending by $800 million.

Senate Majority Leader Jake Corman (R-Centre) has called out the problems with Gov. Wolf’s plan:

“You don’t raise $4.5 billion in taxes to increase spending by $800 million,” Senate Majority Leader Jake Corman, R-Centre, said after the governor gave his address Tuesday. “Come on. Let’s all deal in reality here.”

Not only will Pennsylvanians face an income tax increase, but also an increase of the sales tax from 6 to 6.6 percent. In addition, under Gov. Wolf’s budget, many goods that have been exempt from the sales tax would be taxed, include nursing care, parks, and textbooks. It’s ironic that Gov. Wolf wants to start taxing textbooks, when at the same time he increases spending on education.

Wolf’s proposed budget hurts the economy’s driving forces the hardest: small business owners

The National Federation of Independent Business calls “small business the biggest loser in governor’s proposed 2015-16 state budget.” According to IRS data, over 776,000 small businesses file under the individual income tax system and Gov. Wolf’s budget would leave them with less income to hire more workers, give raises to current workers, and invest in Pennsylvania. That IRS data only accounts for sole proprietors. Including the share of small businesses made up of S-Corps and partnerships, a couple hundred thousand more small businesses that file under the individual income tax system in Pennsylvania and would be adversely impacted by Gov. Wolf’s budget.

Elections have consequences. Pennsylvania taxpayers will likely face perennial tax hike threats from Gov. Wolf. Fortunately, the Republicans-controlled legislature is less inclined to drain more money from the private economy to increase government coffers.

 

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Lookout! Congress Considering Increasing the Cost of Flying

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Posted by Sven Werner, Chris Prandoni on Friday, March 13th, 2015, 3:19 PM PERMALINK

In about 200 days, Congress will be reauthorizing the Federal Aviation Administration (FAA). Why should you care? Because a Congressional coalition is forming to increase passenger fees to pay for airport projects.

These potential tax increases would significantly affect passengers.

Taxes, 17 of them, already make up 21% of a plane ticket’s price. Proponents of this tobacco-like level of taxation argue that these passenger fees are necessary to support airport spending. This argument presumes that airports need the money, that these investments would not occur without government transfers. However, airports currently have $11 billion in cash holding which is around 357 days of liquidity.

Not only are airports flush with cash, they have also spent $70 billion on completed, underway, or approved airport capital projects at the nation’s 30 largest airports since 2008. Since 2000, airports revenue has increased by 65% percent to $24.5 billion in 2013. Yet, many airports are claiming poverty and that they need even more money from airlines and passengers.

In order to achieve this end, these spending interests are looking to increase the Passenger Facility Charge (PFC) cap. A one-dollar increase in the PFC cap would lead to $700 million in extra costs for passengers every year. 

Unsurprisingly, this idea isn’t a popular one: 87% of voters already think the PFC is too high; 82% of people oppose the almost doubling of the PFC and the automatic increases that come with indexing the PFC to inflation.

Most airport revenue streams are at a record high, so it’s hard to justify a tax increase. Since the federal aviation taxes have tripled since 1972 – and since 2000 there has been a 52% increase on a per passenger basis since 2000 – Congress should consider reducing taxes for passengers, not increasing them.

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Utah Legislators Attempting to Raise Gas Tax

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Posted by Sven Werner on Tuesday, March 10th, 2015, 5:12 PM PERMALINK

The Utah state legislature is pushing forward on several gas tax increase proposals as a means to plug a projected $11.3 billion shortfall in transportation funding through 2040. Not content with finding savings and efficiencies in the state budget, Utah lawmakers are looking for the easy way out by increasing taxes.

Both the Utah State Senate and the House of Representatives agree on raising taxes, but they differ on the specifics. The senate proposal raises the gas taxes from 24.5 cents to 34.5 cents, whereas the House is looking to implement a percentage based tax.

SB160 would raise $130 million for maintenance. For the average driver the tax means an additional $48 per year in taxes. Diesel fuel taxes would be raised by 5 cents a gallon, the gas tax would be raised by 10 cents a gallon.

Utah House Rep. Johnny Anderson (R-Taylorsville)’s HB 362 would convert the state's per-gallon gas tax to an ad valorum sales tax.

According to Rep. Anderson’s plan, the state’s per-gallon gas tax will be converted to a sales tax with a local option, meaning that counties can hold referendums to raise the general sales tax 0.25 %. The additional revenue would go directly into funding and supporting local transportation projects and needs.The State Tax Commission would adjust the gas tax prices once a year – basing the rate off the average wholesale price from the previous year.

Under Anderson’s plan, in te the first year, the ad valorum tax rate would be revenue-neutral, but over time, Utah motorists would see an increasing rate as gas prices rose.

One of the most dubious components of HB 362 would be the false choice it presents local taxpayers. The local option would stick voters with the choice of the potentially higher state ad valorum rate or an even higher rate if a local option is enacted. There is no option for localities to lower the gas tax rate.

Billy Hesterman, Vice President of Utah Tax Payers Association has responded to Rep. Anderson’s call for higher taxes:

If I'm living in Davis County and I work in Salt Lake County and Davis passes it and Salt Lake doesn't. My purchasing decision is going to be decided. I'm going to purchase gas in Salt Lake County instead of in Davis. And we would rather see the market drive where I decide to purchase instead of a tax policy.

Even Rep. Anderson admits that with his proposal, "We're not fixing the whole problem. We’re taking steps toward it.” This sounds an awful lot like Rep. Anderson is leaving the door open for future tax hikes to fund transportation in Utah.

Utah taxpayers and motorists would be better served if the state legislature tackled state spending, prioritized transportation needs, and explored the possibility of future public-private partnerships to ensure an adequate transportation infrastructure. Between 2000 and 20009, state spending in Utah outpaced inflation and population growth by nearly $9 billion. That $9 billion overspending problem could have been avoided with revenue going to better use on needs such as transportation. To put it bluntly, the gas tax measures being pushed through the Utah legislature are not the solution Utah needs.

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Texas Lawmakers Look to Increase the Lone Star State’s Tax Advantage

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Posted by Sven Werner, Patrick Gleason on Friday, March 6th, 2015, 2:35 PM PERMALINK

Texas has been a role model in terms of governance, tax reform and job creation, but it still has a major flaw: a gross receipts tax on employers known as the margin tax. The Texas margin tax is complex, unnecessary and keeps small and mid-size businesses from creating jobs. It even applies to companies who don’t make a profit.

Its elimination would move Texas from being currently ranked 10th at Tax Foundation’s Business Tax Climate Index to 3rd best in the nation.  A Texas Public Policy Foundation Report  found that, based on dynamic econometric models, repealing the margin tax would lead to the creation of 129, 200 jobs in the first five years after its elimination.

The good news is that legislation to get rid of the margin tax, Senate Bill 105, is being considered by legislators. Texas Gov. Greg Abbott stated that he “will reject any budget that does not include genuine tax relief for Texas employers and job creators.” A great way for legislators to send Gov. Abbott what he has requested is to pass legislation to end the margin tax.

Other states are working to make their tax codes more competitive by cutting rates and providing relief to individuals, families, and employers. As such, Texas lawmakers cannot rest on their laurels. Americans for Tax Reform reached out to Texas legislators today to urge them to repeal the margin tax. A copy of s letter can be found below:

March 6, 2015

Dear Members of the Texas Legislature,

On behalf of Americans for Tax Reform and our supporters across the Lone Star State, I urge you to keep taxpayers in mind as you consider the issues that will come across your desk during the 2015 legislative session. There are two main things that you can do to protect Texas taxpayers and stoke economic growth: 1) rein in the unsustainable trajectory of state spending, which can be accomplished by instituting a true and unbustable state spending cap; and 2) eliminate the state’s business tax, otherwise known as the margin tax.  

As has been noted in Forbes, even relatively-well governed states like Texas face significant fiscal challenges. A Texas Public Policy Foundation report titled “The Conservative Texas Budget,” outlines a series of smart policy recommendations and reforms to rectify Texas’s overspending problem that, while not as bad as that of some states, is still a major problem. One of those proposed reforms, the institution of clear and achievable spending limits, is the best step that lawmakers could take to protect Texas taxpayers.

I also write today to urge you to use the 2015 session to rid Texas of the margin tax. As you know, legislation, Senate Bill 105, has been filed that would do just that. The Lone Star State has been a model for other states on numerous matters of governance, and for good reason, but the margin tax is the one major blight on the state’s otherwise stellar business tax climate and now is the perfect time to unlock the state’s full economic potential by repealing this misguided tax.

The margin tax reduces the job-creating capacity of Texas businesses and does so in an incredibly onerous way at that. As the Texas chapter of the National Federation of Independent Businesses put it, the margin tax is "crippling the small and mid-sized businesses” throughout the state. In addition to the harm it does to employers, economists of all political stripes agree that it is one of the worst ways to raise revenue. Professor John Mikesell, an expert in public finance at Indiana University, has described the margin tax as a "badly designed business profits tax...combin[ing] all the problems of minimum income taxation in general—excess compliance and administrative cost, penalization of the unsuccessful business, undesirable incentive impacts, doubtful equity basis—with those of taxation according to gross receipts."

The tax is so complex – it applies variably to different industries and types of businesses – that the costs to comply with this levy for some employers are actually greater than their tax liability. One of the more egregious aspects of the margin tax is that it applies to companies without regard as to whether a profit was generated, meaning businesses that lost money can still end up having a margin tax liability.

A recent TPPF report found that, based on dynamic econometric modeling, eliminating the margin tax could result in a gain of $10.8 billion in new real personal income in the first year and a personal income boost of $16 billion in the first five years. The report also found that repealing the margin tax could generate an additional 129,200 jobs over the next five years. Texas is currently ranked as having the nation’s 10ths business tax climate the 3rd best in the country.

 

Other states are eager to compete with Texas for jobs. In fact, a number of states have passed tax reform in recent years that seeks to make them more competitive with Texas, and over a dozen are set to pursue such policies in 2015. It’s important for Texas lawmakers to not rest on their laurels. In order to stay ahead of states that wish to entice employers away from Texas, it would behoove legislators to repeal, or begin phasing out, the margin tax in 2015. It’s time to eliminate this unnecessary impediment to private sector growth and job creation. It’s also time to right the unsustainable trajectory of state spending, which can be accomplished with a robust spending cap, like the one proposed by TPPF.

 

When good ideas come out of Texas, such as smart criminal justice reform, it’s easier to take them elsewhere because other states rightfully want to emulate Texas. But that can cut both ways. For example, a Texas-style margin tax was on the Nevada ballot last year. The pro-margin tax campaign there basically had one talking point: “Texas has a margin tax, so it must be a good idea.” Fortunately Nevada voters were smart enough to reject that ballot measure. Killing the margin tax will be good for the Texas economy, but it will also make it less likely that such a damaging tax will be adopted elsewhere.

I urge you to use the 2015 session to give a boost to the Texas economy by getting rid of the margin tax. Americans for Tax Reform will continue to follow these issues closely throughout session and will be educating your constituents as to how you vote on these important matters. If you have any questions, please contact Patrick Gleason, 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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