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Can California afford to Live like Ed Begley Jr.? Nope
Posted By:  - 11/02/10

The reality television show “Living with Ed” documents actor and environmentalist Ed Begley Jr.’s adventures and challenges in living a low-carbon emission, or so-called “green” lifestyle outside of Los Angeles. In each episode, we watch as Ed tries to grow his own drought-resistant crops or get good mileage out of his electric car. Though we may chuckle as Ed endeavors to practice what he preaches, his reality could become the reality for all of California unless Proposition 23 passes.

Proposition 23 on the statewide ballot would suspend AB 32, a 2006 law that requires a 30% reduction in carbon emissions by 2020, until unemployment falls to 5.5 percent for four consecutive quarters. AB 32 achieves the emissions reductions through new taxes and regulations on cars, trucks, appliances, and farming. Additionally, AB 32 mandates electricity from renewable sources like wind and solar power.

The bill’s supporters said it would create jobs, so-called “green jobs,” in California, but a study a the Pacific Research Institute, a San Francisco-based think tank, predicts 150,000 lost jobs by 2012 and another 1.3 million by 2020. Additionally, a Sacramento State University study shows that AB 32 will actually increase a family’s cost of living nearly $4,000, boost the regulatory burden on an average small business by nearly $50,000. All of this to create a “green” lifestyle for all of California.

These figures are not idle speculation. European countries that have tried programs like AB 32 have actually experienced job losses. Gabriel Calzada, a Spanish economist and lead author of a study detailing the economic costs of Spain’s green experiment, found that the Spanish economy lost a net 2.2 jobs for every “green job” the mandates created. And most of the green jobs (9 out of 10) created from renewable energy mandates were temporary because they were installation jobs. As a result of the mandates, Spanish companies like Acerinox, a steel maker, exported manufacturing jobs to South Africa and Kentucky. California companies will likely do the same.

California simply cannot afford this. The American Legislative Exchange Council already ranks California 46th out of 50 on its Economic Outlook Rank. The state ranks so poorly due to its high state and local tax burden, its income tax progressivity, size of its public workforce, and public employee compensation. For example, the state boasts one of the highest marginal income tax rates on high-income earners, currently at 10.55 percent, and the highest marginal corporate income tax rate in the West, at 8.84 percent. However, all of this translates into a weaker economic output. Adding to the tax burden by allowing AB 32 to take effect would only exacerbate the state’s bad economic problems.

No other state has tried to follow California’ lead in creating it’s own cap and trade program, and for good reason. Even under the best economic conditions, the impacts of AB 32 on the state would be terribly harmful. But at a time when the state’s unemployment rate is in excess of 12 percent and the state is broke by $20 billion, allowing AB 32 to take affect would be downright devastating to Californians. Though we may laugh and envy some aspects of Ed Bagley’s lifestyle, California simply cannot afford it.

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NTU Joins with Liberal Group to Identify $600 Billion in Waste
Posted By: Andrew Moylan - 10/28/10

Today, NTU joined with the liberal group U.S. PIRG to release a report called "Toward Common Ground: Bridging the Political Divide to Reduce Spending." This report debuts a list of $600 billion worth of specific federal spending reductions. With all the talk about debt and deficits, we saw an opportunity to put together a true left-right coalition in order to begin the conversation about the difficult choices we’ll have to make as a nation. We thought it would be useful to reach across the ideological divide to identify specific items that we could cut from the federal budget without reducing the quality of government services or neglecting the government's basic commitments.

The U.S. PIRG and NTU study identifies 30 specific, actionable items to cut in federal spending, including:    

  • $62 billion in savings by eliminating wasteful subsidies to farmers and large corporations.
  • $354 billion in savings from reforming inefficient contract and acquisition procedures.
  • $77 billion in savings by improving execution of existing government programs as well as eliminating unneeded programs.
  • $108 billion in savings from ending low-priority or unnecessary weapons systems, along with rightsizing other programs.

While we're under no illusions that every group or individual on the left and right will agree with our list, we think that it can serve as something of a consensus document from which Congress and the President's Fiscal Commission can work. Simply stated, we can't continue to kick the can down the road on reducing the size of the federal government.  In order to head off a debt crisis like that facing Greece today, we need to begin scaling back our unsustainable spending habits.  This list can help to do that without starting a political food fight.

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An Alternative to Ethanol
Posted By:  - 10/21/10

In case you're looking for an alternative to ethanol, Investors.com points out that you could purchase a Chevy Volt.  However, they don't seem completely sold on it: "So it's not an all-electric car, but rather a pricey $41,000 hybrid that requires a taxpayer-funded $7,500 subsidy to get car shoppers to look at it."

 

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More on Big Ethanol
Posted By:  - 10/20/10

A little more on Big Ethanol.  This week Gregg Easterbrook has a piece on Reuters.com that touches all of the bases:  subsidies, environmental benefits, and taxes.  Give it a read.

I could not agree more.

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Public Presidential Campaign Financing Covered in NTUF Taxpayer’s Tab
Posted By: Dan Barrett - 10/14/10

Tab Insert

Springing forth from the successful BillTally Quarterly Report in Issue 14 of The Taxpayer’s Tab last week, NTU Foundation brings you brand new cost estimates in the traditional weekly format -- that's four bills introduced in the 111th Congress that would increase or decrease federal spending.

The most expensive bill of the week is a collaborative effort between pro-choice and pro-life caucuses in the House, to prevent unintended pregnancies and attempt to reduce the need for abortions. If enacted, the $3.9 billion first year cost would go towards state grants and programs supporting education and women’s health.

This week’s Taxpayer’s Tab details the following bills:

  • HR 3312, Preventing Unintended Pregnancies, Reducing the Need for Abortion, and Supporting Parents Act
  • S 3452, Valles Caldera National Preserve management Act
  • HR 775/S 535, Military Surviving Spouses Equity Act
  • HR 6061/S 3681, Presidential Funding Act

To supplement the large number of Military Surviving Spouses Equity Act cosponsors, the following is a breakdown by party and chamber.

  • House – 352 Congressmen in Support
    • 222 Democrats (87 percent of all Democrat Representatives)
    • 130 Republicans (73 percent of all Republican Representatives)
  • Senate – 60 Senators in Support
    • 40 Democrats (68 percent of all Senate Democrats)
    • 17 Republicans (41 percent of GOP Senators)
    • 2 Independents (100 percent of Independent Senators)*
    • 

* Senators Lieberman and Sanders caucus with the Senate Democrats.

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Got questions about ballot measures? NTU's Ballot Guide has answers
Posted By:  - 10/14/10

Voters face many important decisions in the upcoming elections, which are now less than three weeks away. But many of these critical decisions will not involve choosing between the names of candidates. Instead, voters will have to choose between letters and numbers identifiying hundreds of state and local ballot measures, many of which could have an especially profound impact on tax, spending, and other fiscal policies for years to come and regardless of which political party triumphs in the state houses. To help taxpayers better understand these measures, NTU has produced and made available on our website "The 2010 Ballot Guide: The Taxpayers Perspective."

Our Guide is more than just a list of measures. The Guide is an analysis of these measures on the state and local ballots across the country, providing evaluations of how these measures grow the size of government and increase the tax burden on hard-working families. Unfortunately, there are many such measures on the ballot according to the Guide. However, many other measures on the ballot will give taxpayers opportunities to exercise a greater degree of control over government tax, spending, and regulatory powers.

Here are some highlights from the pages of the Guide:

  • In Washington State, Initiative 1098 would impose a state-level income tax there for the first time, beginning on individuals with incomes above $200,000 but later possibly extending to other groups at the Legislature’s discretion.  This would knock Washington off the list of just nine states without a broad-based income tax. On the other hand, Initiative 1053 would require two-thirds of the Legislature or a majority of voters to raise taxes in the future, while Initative 1107 would roll back taxes on candy, bottled water, and soft drinks.
  • In California, Proposition 23 on the statewide ballot would suspend the California Global Warming Act, and all of its mandates until unemployment eases. Taxpayer advocates in the state argue that this measure would prevent substantial hikes in energy costs on struggling consumers. Meanwhile, Proposition 25 would do away with a two-thirds legislative vote requirement to pass a budget but Proposition 26 would extend a two-thirds vote stricture on increases in many fees.
  • Voters in Massachusetts will consider a measure that would reduce the state’s sales tax from 6.25 percent to 3 percent, as well as one repealing in most cases the sales tax on alcoholic beverages.
  • Proposition A on the Missouri statewide ballot would take away the authority for cities to levy an earnings tax, require voter approval for the continuation of earnings taxes where they currently exist, and provide for their eventual phase-out.
  • At the local level, voters in California's San Diego County, as well as voters in Illinois' DuPage County, will vote on measures that would either require voter approval for increases in public safety pension benefit formulas or call upon the state to undertake serious pension reforms immediately.

We hope you find the Guide useful in evaluating the choices awaiting you at the polls. Be sure to check back with NTU after the election for our report on how taxpayers fared.

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Big Ethanol
Posted By:  - 10/13/10

Robert Bryce has a great piece on ethanol in The Examiner.  If you haven't read it, please do so.  Here are the closing paragraphs:

It's time to end the corn ethanol boondoggle. Despite decades of lavish subsidies, ethanol has done nothing to cut oil imports. Rather than further compound the mistakes that have already been made by increasing the volume of ethanol in the U.S. motor fuel supply, the EPA and Congress should recognize that ethanol is not, and has never been, an energy program.

Instead, it is a pernicious example of how agriculture subsidies are promulgated and expanded for the benefit of the few at the expense of the many.

I could not agree more.

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Drilling to Resume
Posted By:  - 10/12/10

According to the Wall Street Journal, the Obama Administration has lifted its ban on deep-water drilling. Good news, right? Well, yes, but we’re still unsure about the timeline and when oil rigs will actually be able to resume. That’s because the Department of the Interior is requiring rig operators to comply with all post-spill safety regulations, and verify that they own equipment to contain a blowout, before application approvals are granted.

It’s a step in the right direction, but the Administration’s decision may have deeper implications than what’s apparent at first glance. Officials in the oil and natural gas industry have said these new regulations could “sharply escalate the costs of operating in U.S. waters.” And while the ban has been lifted over a month before the target date of November 30, there is a good chance rig operators will not return to work before then. Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement, emphasized that “the pace of approvals will depend on the quality of companies’ applications and whether they adhere to the new safeguards.” Considering the speed at which our ever-growing federal government tends to operate, is this statement concerning to anyone else?

It also comes at a fairly convenient time for vulnerable Members of Congress along the Gulf Coast who continue to face an embattled economy and disgruntled constituents. Given our current economic climate, it’s inexcusable for our government to threaten jobs as well as the opportunity to generate an influx of revenue that could go toward paying off other liabilities and, you know, our $13 trillion debt. We all want rig operators to exercise safety precautions, and sincerely hope the underlying cause of the spill is corrected to avoid another tragedy, but stopping drilling altogether is not the answer.

Let’s give the Obama Administration the benefit of the doubt and (cautiously) commend them for lifting the deep-water drilling ban. At the same time, it’s imperative that we urge them to commit to expediting the permit review process. It’s the right thing to do…for jobs, for families, and for America’s entire economy.

For those of you who are interested, here is the safety report issued by Interior Secretary Ken Salazar back in May. It outlines many of the regulations for which oil rigs will now be responsible.

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Pennsylvania House passes largest natural gas tax in the nation
Posted By:  - 10/01/10

As a native of Pennsylvania, it pains me to single out my home state for pushing unwise tax and spending policies. Unfortunately, the politicians who run the state and local governments leave me with little choice but to speak out.

Earlier this week, the Pennsylvania House of Representatives passed a bill that would impose a severance tax on natural gas at a rate of 39 cents per 1,000 cubic feet of gas, which would be the nation’s highest such tax. We here at NTU sent a letter to the House in opposition to the tax. The bill passed on Wednesday by a vote of 104-94. But the fate of this tax is uncertain because the State Senate opposes such a high rate. Senate President Pro Tempore Joe Scarnati has told reporters that his chamber is seriously looking at Arkansas’ approach. In Arkansas, natural gas extraction is taxed at a rate of 1.5 percent for three years to allow energy companies to recoup investments, and then it increases to five percent.  

Currently, Pennsylvania levies no such tax. Recent advances in natural gas exploration technology have opened up the Marcellus Shale, a vast natural gas field buried beneath Pennsylvania and other states. Energy companies are lining up to take advantage of this newly accessible resource. Marcellus projects have already created thousands of jobs and yielded more than $1 billion in tax revenues. A study by Penn State University estimates that continued development would provide 111,000 new jobs and $987 million in revenues by 2011. Moreover, these new jobs cut across the energy, manufacturing, service, and retail sectors.

But that kind of economic growth is not enough for Governor Ed Rendell and the other tax and spenders in Harrisburg, who want to a bigger cut from the wealth to pay for their pet projects and programs. Here is why, according to the Pittsburg Tribune-Review:

“Gas production from a typical Marcellus shale well drops dramatically over the first year, starting out at higher than 3,500 mcf, or thousand cubic feet, per day initially, and dropping over the first 12 to 15 months to less than 1,000 mcf per day, according to a Range Resources presentation on its website.”

“At that rate, with the House-approved tax, a typical well would start out generating $1,363 per day and then drop to $390 per day after 12 to 15 months. With the Senate proposal for a 1.5 percent tax for the first three years, the well would raise about $210 daily, based on today's gas prices.” 

The problem is that the high tax the House proposes may stifle natural gas development and economic growth. According to the Commonwealth Foundation, which has created a website devoted to energy issues here, states with high severance taxes, such as West Virginia, have not experienced as much growth in the energy sector, including job creation, as states with lower or no severance taxes. By levying the nation’s highest severance tax on natural gas, Pennsylvania’s politicians could actually impede or ruin the Commonwealth’s opportunity to cash in on this amazing find. Hopefully, Pennsylvania’s State Senate will stand firm against this proposal.

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Washing Away Energy Tax Myths in Washington State
Posted By:  - 09/27/10

In the political arena, people often criticize others without researching the facts or by just plain ignoring reality.   It’s not surprising then that the partisans with the Washington State Democrats did just that when they incorrectly linked the National Taxpayers Union’s (NTU’s) work on a campaign fighting against energy tax hikes to the Contract from America.

To set the record straight, NTU led the effort to oppose energy tax increases by reaching out to citizens nationwide (along with supplemental efforts in Washington and elsewhere) to encourage them to contact their Senators. The participation at a grassroots level was overwhelming, and our members’ input helped block Senator Bill Nelson’s recent attempt to increase taxes on hardworking families.

In fact, NTU’s energy ads have nothing to do with Dino Rossi or the Contract from America; they have everything to do with protecting taxpayers. Furthermore, to contend that Rossi was “rewarded” because he signed the Contract from America is misleading.  NTU’s ad campaign did not harm or reward any candidates; rather, it was launched to alert every American to a major fiscal policy issue and give them the information they needed to take action.  NTU’s mission has always been and will remain to help to protect every single American’s right to keep what they’ve earned. 

Before circulating baseless assertions in the future, we encourage the Washington State Democrats to do their homework and get the facts right.  Doing anything less discredits their work and provides a disservice to the taxpayers of Washington. And those taxpayers deserve better.

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