Tyler Tate

ATR Applauds Arizona Legislature’s Preemption of Targeted Food Taxes

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Posted by Tyler Tate on Friday, March 16th, 2018, 4:37 PM PERMALINK

Recently, the Arizona State Senate unanimously passed House Bill 2484, a bill which would prevent localities from imposing targeted taxes on soda, snacks, and even meat. HB2484 is now headed to Governor Doug Ducey (R) for a signature. ATR applauds the efforts of the legislature to protect consumers and taxpayers from harmful taxes at the local level.

The bill ensures that Arizona consumers face a uniform level of food taxation across the state, rather than a patchwork of punitive taxes varying by city and county. This uniformity is key to providing a stable tax environment to attract business investment and ensure consumers are not targeted based on the food or beverages they buy or the city they reside in.

The bill was precipitated by a well-funded effort by special spending interests to lobby local governments to target disfavored beverages and food with punitive taxes. Over the past several years, multiple cities and counties have enacted these taxes. These experimentations have provided definitive proof that these regressive taxes eliminate jobs, harm consumers, and are completely ineffective at reducing obesity.

For example, the city of Philadelphia enacted a 1.5 cents an ounce tax on sweetened beverages, mostly targeted to reduce soda consumption. An Oxford Economics study found the tax caused 1,200 people to lose their jobs and GDP decreased by $80 million.

However, the tax did not reduce consumption of sugary beverages. Although sales of these beverages fell 29% within Philadelphia, they rose 26% in communities surrounding the city. This indicates Philadelphians simply traveled to surrounding localities without the tax to buy beverages and other groceries.

The city of Berkeley, California implemented a similar tax on sweetened beverages. The tax actually ended up increasing the number of calories consumed, the exact opposite of what was intended.

These regressive taxes hurt lower income people the most. Food taxes are about four to five times as high for lower income families then upper income families.

Finally, small businesses and grocery stores also face revenue loss. After Philadelphia’s tax was enacted, 88% of affected businesses reported revenue losses due to the imposition of the tax. The tax may contribute to the creation of “food deserts,” low income neighborhoods, often in urban areas, that lack grocery stores. By driving down already low sales, targeted food taxes could lead to the expansion of food deserts in more struggling communities.

 ATR strongly applauds the effort of the Arizona legislature to protect consumers, workers, and businesses from these targeted food taxes.

[A copy of the letter ATR sent to the Arizona state Senate can be read here]

Photo Credit: Wikimedia Commons

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West Virginia Teachers Demanded a Raise. Republicans Rejected Tax Hikes to Fund It

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Posted by Tyler Tate on Friday, March 16th, 2018, 4:07 PM PERMALINK

Recently, Republicans in the West Virginia state legislature were able to end a nine day, statewide public school teachers strike by passing a 5% pay increase for teachers. The illegal strike, precipitated by complaints of comparatively low wages, was ended by a $110 million pay increase accomplished without raising taxes. Lawmakers instead agreed to cut spending by $110 million, with most of the money likely to be cut from tourism promotion and Department of Commerce funds.

Striking West Virginia teachers argued they were receiving the fourth lowest average wages in the country for teachers, ranking 48/51 (including Washington, D.C.). However, this statistic does not take pension contributions or other benefits into account. Factoring these benefits in, West Virginia ranks 32/51 in the country for work compensation.

This ranking, however, does not take cost of living into account. West Virginia pay with benefits would likely rank even better given West Virginia has a relatively low cost of living.

The strike destroyed the modern the argument that tax increases are necessary to sufficiently fund education. Rather, lawmakers dedicated to cutting wasteful spending and streamlining government can fund education.

The strike also demonstrates that tax cuts do not inevitably lead to cuts in education spending. While increasing total teacher pay by $110 million, Governor Jim Justice (R) maintained a push for a pro-growth $420 million tax cut designed to bring manufacturing investment and jobs to West Virginia. The bill would have phased out the business tangible personal property tax on manufacturing equipment, with West Virginia only one of fourteen states that levies the tax.

Proponents of teacher raises nationally will try to point to tax reform as a barrier for more significant investments in education. Nationally, however, that narrative falls flat. States like West Virginia, Florida, and Wisconsin have significantly increased education spending while also working to simplify and reduce their tax codes and burdens.

Equally important to these efforts is electing politicians with the fortitude to make tough decisions on which priorities to fund, and stand up to special spending interests to protect taxpayers against the demands for tax hikes at the state level.

Photo Credit: Wikimedia Commons

ATR Urges Utah Legislators to Reject Punitive Tax on Vapor Products

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Posted by Tyler Tate on Monday, February 26th, 2018, 10:16 AM PERMALINK

Recently, Utah Rep. Paul Ray introduced legislation (House Bill 88) to impose a whopping 86% excise tax on tobacco –free electronic cigarettes and vapor products. The tax, which was lowered to 29% in committee, serves as a harsh penalty on an estimated 110,000 Utahans who use e-cigarettes as a means for quitting or reducing their use of cigarettes.

The tax push comes at a time when the international consensus is that e-cigarettes are at least 95% less harmful than traditional combustible cigarettes. Unlike traditional cigarettes, e-cigarettes are free from tobacco, tar, and other carcinogens that make cigarettes harmful.

Over the past decade, e-cigarettes have emerged as an innovative and effective market solution that empowers smokers to quit tobacco use by transitioning towards a significantly less harmful alternative. Notably, this is a goal public health advocates have failed to achieve for decades.

A punitive excise tax on these life-saving products threatens to put them out of the reach of those who need them most. Lower and middle-income consumers compose the overwhelming majority of smokers, and many spend up to 25% of their income on tobacco. Imposing a regressive and steep excise tax on e-cigarettes directly hinders the ability of low and middle income consumers to afford to try a safer alternative to smoking tobacco.

Proponents argue these attempts to tax e-cigarettes are based on increasing public health, however, the real motivation is to preserve the massive windfall from exorbitant tobacco excise taxes. Since 1998, more than $500 billion has been transferred from consumers and businesses to the government from tobacco taxes and the federal Master Settlement Agreement with tobacco companies.

As consumers continue to switch to tobacco-free products, politicians have scrambled to replace revenues from tobacco taxes with e-cigarette taxes. Rather than pursue damaging tax hikes on life saving products, legislators should allow the free market to empower individuals to better their health.

Representative Paul Rey's attempt to hike taxes on 110,000 Utahans in 2018 comes as no surprise, considering he has pushed this tax every year for the last several years. Rep. Ray has also declined to sign the Taxpayer Protection Pledge, a written commitment to voters to oppose tax hikes.  

ATR strongly urges Utah legislators to protect Utah e-cigarette consumers and public health by rejecting House Bill 88. ATR’s letter to the Utah Taxation & Revenue Committee can be found here.

Photo Credit: Wikimedia Commons

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ATR Supports Wisconsin Legislators’ Efforts to License Dental Therapists

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Posted by Tyler Tate on Friday, February 16th, 2018, 9:56 AM PERMALINK

Wisconsin legislators recently introduced innovative legislation to create a mid-level dental practitioner position in an effort to reduce healthcare costs and increase access to dental care. If passed, Senate Bill 784 and companion Assembly Bill 945 would allow the state dental board to license educated and qualified mid-level dental practitioners as dental therapists.

Similar to dental hygienists, dental therapists would work under the supervision of dentists to provide an expanded number of services to dental patients, including filling cavities and other basic procedures. The position mirrors the nurse practitioner system in hospitals, where mid-level providers work within a broader health team to provide quality service at a lower cost to consumers.

This pro-consumer legislation may be the solution to reducing costs and increasing access to dental care in Wisconsin, especially for rural and underserved populations. Nationwide, 63 million Americans live in areas designated by the Department of Health and Human Services as dental shortage areas.

By allowing dental therapists to handle basic procedures, dentists would have greater flexibility to focus on more complex procedures and treat more patients, similar to how dental hygienists enable dentists to efficiently use their time to serve patients. This greater efficiency holds the key to reducing dental costs and increasing access to care, all without cost to taxpayers or increasing government regulations.  

The change would especially benefit lower income households and Medicaid recipients. Currently, only one in three dentists accepts Medicaid recipients. By decreasing the costs of providing dental services, this legislation enables more dentists to offer services to Medicaid recipients.

Dental therapists can already practice in Alaska, Minnesota, Maine, and Vermont, which have all authorized the licensing of these mid-level practitioners.

Furthermore, the policy has strong bipartisan support on the national level. According to a poll commissioned by the Americans for Tax Reform Foundation and conducted by Wilson Perkins Allen Opinion Research, 79% of Americans support the creation of a mid-level practitioner position. The support is evenly spread among Americans of all parties, with 77% of Republicans, 80% of Democrats, and 80% of Independents in favor. 58% of all respondents strongly support the creation of this position, indicating support is intense and broad.

ATR strongly urges the Wisconsin legislature to expand the scope of practice for dental hygienists through the creation of a new mid-level dental provider. ATR's letter to the legislature can be found here.

Photo Credit: Wikimedia Commons

Eric Greitens Proposes $800 Million Tax Relief Plan for Missouri Taxpayers

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Posted by Tyler Tate on Monday, February 12th, 2018, 2:28 PM PERMALINK

Last week, Governor Eric Greitens (R-Mo.) rolled out an ambitious tax reform package aimed at creating jobs and providing tax relief for working Missourians. The reform would cut taxes for 97% of Missouri taxpayers and eliminate state income tax liabilities for 380,000 Missouri taxpayers. To offset most of the revenue reductions, business taxes and deductions are adjusted.

Under the plan, Missouri’s current top income tax rate of 5.9% is reduced to 5.3%, a 10% cut. The rate is paid by every Missouri taxpayer making at least $9,072 annually. The plan also enacts a statewide Earned Income Tax Credit (EITC) for Missouri taxpayers earning less than $150,000 annually. The Missouri EITC is a non-refundable tax credit against owed state income taxes equal to 20% of the federal EITC.

The business side of the reform plan takes the state corporate income tax from 6.25% down to 4.25%, moving Missouri from the middle of the pack to having the 2nd lowest corporate income tax out of the 44 states that levy the tax. In fact, Missouri would have a more competitive tax rate than every single state it borders, incentivizing businesses to invest in Missouri.

These three pieces of the reform plan are a $787 million tax cut for Missouri taxpayers, significantly improving the business climate and increasing take home pay for the average family. A married couple with two children earning $40,000 annually would receive a 51.24% tax cut, resulting in annual income increase of $471 under this plan.

To offset these decreases, a total of $748 million in business tax changes are implemented, including the elimination of timely filing discounts, Single Sale Factor apportionment, and a limit on federal tax deductions.

ATR applauds Governor Greiten’s proposal to provide significant tax relief for Missouri taxpayers and encourages the legislature to pass the plan.

Photo Credit: Eric Greitens, Facebook

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California Space Tax is Out of This World

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Posted by Tyler Tate on Friday, February 2nd, 2018, 4:24 PM PERMALINK

Last month, Republican Assemblyman Tom Lackey introduced legislation to repeal California’s recently enacted tax on space travel. California’s space tax, the first ever created, requires businesses exploring and attempting space travel to pay taxes based on miles traveled through space and the frequency of flight launches.

The tax has the potential to greatly harm California’s $61.6 billion aerospace industry and the high paying jobs and investment it generates because it puts California at a further disadvantage to competing states.

Importantly, California is increasingly locked in competition with other states to attract and retain aerospace businesses. However, in contrast to California’s litany of high taxes and anti-business regulations, competing states like Florida, Texas, and Georgia have gone as far as offering tax incentives to aerospace businesses to entice them to move away from California.

The impacts of these opposing policies on California’s economy are already being felt. Moon Express, a business at the frontier of the space industry, has already left California for Florida because of Florida’s economic development incentives. Although nonintervention is preferable to economic incentives, these aggressive actions to attract businesses illustrate that until the space tax is repealed, California will continue to fall further behind in attracting jobs and business investment to the state.

Unfortunately, the damage of this space tax is not limited to jobs and business investment. Jon Coupal, president of the Howard Jarvis Taxpayers Association, notes that “space exploration has led to advances that fundamentally change lives, including solar panels and artificial limbs.” The space tax threatens to block the invention of these innovative and transformational products, which would significantly impact the lives of all Americans.

Lackey’s bill to repeal the space tax is currently pending before the California Assembly Committee on Taxation and Revenue and would require support from a significant number of Democrats to pass. The bill poses a key question for California Democrats: is the sky no longer the limit for high taxes?

Photo Credit: Reuters

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ATR’s Paul Blair Talks Democrat Lawsuit Against Trump Tax Cuts on Fox News at Night

Posted by Tyler Tate on Monday, January 29th, 2018, 1:38 PM PERMALINK

Last Friday, Americans for Tax Reform’s Paul Blair appeared on Fox News at Night with host Shannon Bream to offer his insights on the latest effort to block the Tax Cuts and Jobs Act.

The discussion focused on the announcement that New York, New Jersey, and Connecticut plan to jointly file a lawsuit challenging the tax cuts over the cap on the State and Local Tax (SALT) Deduction.

Blair made the point that after spending months characterizing these tax cuts as only benefitting the rich, Democrats in high-tax states are now fighting against the law in order to protect a deduction that mostly benefits high income taxpayers. Addressing the root cause of the problem, Blair stated “This has nothing to do with tax rates at the federal level. It has everything to do with the fact that, for decades, they've paid no attention or concern to what's going on in their own state."

Rather than challenge a bill that reduces taxes on almost all Americans, Blair argued these Democrat governors, who represent the three states with the highest state and local tax burdens in the country, should focus on cutting taxes to achieve parity with other states.

Wrapping up, Blair said “I hope the outcome, though, is that a number of Democrats in these states become very familiar with the 10th Amendment… they are not going to find a solid legal strategy that allows them to sue… because the rest of the country will no longer subsidize their very, very high tax rates.”

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Governor Rick Scott’s Constitutional Taxpayer Protection Initiative Passes Florida House

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Posted by Tyler Tate on Monday, January 29th, 2018, 10:12 AM PERMALINK

At the beginning of the 2018 state legislative session, Governor Rick Scott (R-Fla.) began pitching an extensive taxpayer protection initiative to state lawmakers, businesses, and Florida voters that would place future limits on the ability of the state legislature to raise taxes and fees.  

The Constitutional Amendment, which recently passed the House of Representative by a vote of 80-29, would amend Article 7, Section 19 of the Florida Constitution to require a two thirds vote, rather than a simple majority, in both houses of the Florida Legislature to increase or impose any tax or fee on Florida residents and businesses. If also adopted by the state Senate, the amendment will be put to Florida voters in a ballot initiative requiring 60% of the vote to pass this November.

In pitching his initiative, Scott recently stated that it “will force leaders to contemplate living within their means rather than taking the easy way out and just sticking it to the public by raising taxes on families and job creators.”

If the initiative is successful, Florida would join more than a dozen other states with similar limitations on the ability of a legislature to raise taxes without a supermajority vote. However, Scott’s initiative goes one step further than similar initiatives by applying the supermajority requirements to fee increases in addition to tax increases. This component is crucial, as lawmakers in states such as California have used the “fee” loophole to bypass supermajority requirements to implement relentless waves of tax increases on their states’ residents.

Scott’s momentous initiative continues to pick up broad support and key endorsements across Florida. The initiative is also supported by leading public officials such as Florida House Speaker Richard Corcoran and Florida Agricultural Commissioner Adam Putnam, and organizations such as National Federation of Independent Businesses (NFIB) and Americans for Prosperity.

Scott’s initiative is the culmination of a 7-year record of taxpayer relief, job-creation, and economic growth. Since taking office, Republican lawmakers and Gov. Scott have cut taxes by more than $7 billion and Florida’s private sector has created almost 1.5 million jobs.

ATR strongly supports Scott’s historic initiative to create a permanent protection against unnecessary and disastrous tax increases to continue Florida’s impressive record of job creation and economic growth and urges the Senate to follow the House by voting to place the issue upon the ballot this year. 

Photo Credit: Will Dickey, AP/Florida Times-Union

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Governor Jim Justice Proposes the Just Cut Taxes and Win Act

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Posted by Tyler Tate on Monday, January 29th, 2018, 9:09 AM PERMALINK

This week, Governor Jim Justice (R-W. Va.) proposed the Just Cut Taxes and Win (JCTAW) Act, a bill that would reduce the business tangible property tax imposed on many businesses in the state of West Virginia. Over six years, the bill would reduce taxes by about $420 million, specifically on manufacturing businesses. Bill proponents argue that the JCTAW is designed to bring manufacturing jobs back to West Virginia and make the state more competitive for manufacturing.

The JCTAW Act would start by phasing out the $140 million business tangible personal property (TPP) tax on industrial machinery, equipment and inventory over a period of six years, with the tax permanently eliminated in Fiscal Year 2026. The current tax rate is between 2% - 3% (depending on the county the business is in) on 60% of the market value of the business property.

West Virginia is one of only fourteen states that taxes industrial business inventory and has the fifth highest TPP tax among those states. The tax is especially harmful to attracting businesses that offer high paying, middle class manufacturing jobs because it makes equipment ownership unnecessarily expensive. In fact, a Tax Foundation policy report found that the TPP tax causes business investment to “flow out of jurisdictions with high tax rates into jurisdictions with lower tax rates.” This puts West Virginia at a major disadvantage compared to non-TPP tax states like Ohio, Wisconsin, and Pennsylvania when it comes to attracting manufacturing jobs from states with less than friendly business climates across the United States.

The JCTAW Act is especially timely given the long-term trend of states such as Ohio, Florida, and Arizona moving to reduce or eliminate their TPP taxes. As this trend continues, and unless West Virginia acts, the state will fall further behind other states in attracting business investment if it fails to eliminate the TPP tax sooner rather than later.

ATR strongly supports Governor Justice’s and the legislature’s effort to deliver a win to West Virginia businesses and workers through the Just Cut Taxes and Win Act.

Photo Credit: Perry Bennet, West Virginia Legislative Photography

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State Democrats Fight to Protect Abused Wealthy Taxpayers From Their Own Misguided Tax Policies

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Posted by Tyler Tate on Friday, January 19th, 2018, 9:46 AM PERMALINK

State Democrats Fight to Protect Abused Wealthy Taxpayers From Their Own Misguided Tax Policies

Since the passage of the Tax Cuts and Jobs Act of 2017, high tax states like California, New York, and New Jersey have been scrambling to respond to the $10,000 cap placed on deducting state and local taxes (SALT) from federal income taxes. Rather than cutting bloated state government spending and reducing taxes, Democrat politicians in these states are trying to find wacky ways around the cap. Here are several of the most insane proposals put forward by tax-and-spend Democrats:

California: Liberal Democrat Senator Kevin De Leon has proposed legislation to create a "California Excellence Fund." Instead of paying state income taxes as a result of the cap on SALT, California residents would "donate" the additional amount owed in taxes to this fund and receive an equal credit that would cover the cost of their state income taxes. Because charitable contributions are tax deductible on federal income taxes, this proposal in theory would preserve the deduct-ability of state income taxes.

However, De Leon's proposal would almost certainly violate the IRS definition of what qualifies as a charitable donation. According to the non-partisan Tax Foundation, IRS Publication 526 specifies that a “charitable contribution” only qualifies as such to the extent the contributor does not benefit from the act of charity. Given this definition, a “charitable” contribution that is made solely to replace an equivalent state tax liability would not comply with this IRS rule.

De Leon’s proposal to protect wealthy taxpayers from his own party’s misguided policies is no surprise, given that California has the highest top income tax rate in the country, at 13.3%

New York: Democrat Governor Andrew Cuomo is considering partially replacing the state income tax with an equally costly payroll tax. Under this idea, your employer would cut your paycheck by the amount you pay in state income taxes to pay for the payroll taxes. Then, your taxable take home pay under the federal income tax would equal what it would have been if the SALT deduction was left in place.

However, this proposal would be incredibly difficult to implement, likely resulting in a major increase in government bureaucracy and making a complex tax system that much worse. In order for the new payroll tax rates to even be similar to current income tax rates, a new and untested graduated payroll tax would have to be implemented and administered. New York’s tax burden is currently ranked as the third highest in the country.

New Jersey: New Jersey Democrats are considering a similar approach to California, taking the charitable fund idea and expanding the proposal beyond the state level to cities and other localities. Not surprisingly, the same issue of IRS rule violations will likely block this shell game from taking effect.

New Jersey lawmakers are proposing this extreme measure in order to continue to cover up their exorbitant property tax rate, which at 2.19% is close to double the national average. In fact, the average New Jersey homeowner pays a whopping $8,353 just in property taxes annually.

Instead of proposing insane shell games to continue to mask the cost of their exorbitant state taxes, Democrats in California, New York and New Jersey would do well to focus on the root cause of the problem: their own high tax burdens on high income earners. However, this wish is just as likely to succeed as their ridiculous plans to protect their wealthy constituents from their own misguided policies.

Photo Credit: Deanne Fitzmaurice

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