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Tax Freedom Day Nothing to Celebrate This Year
Happy Tax Freedom Day! Ok, maybe I shouldn’t have said “happy.” Today is a made-up holiday (expect a Hallmark card soon) marking the day when the average American has earned enough in wages to pay off their tax bill to the federal, state, and local government.
A would-be joyous occasion, if it didn’t take more than three months of work to accomplish. In fact, Tax Freedom Day is three days later than it was in 2012, in large part due to new taxes in the Patient Protection and Affordable Care Act and the return of the death tax.
It’s depressing enough to think the average American has to work 101 days to earn enough to pay off their tax burden, but even that doesn’t represent the true cost of government. The Tax Foundation, the group responsible for doing the calculations behind Tax Freedom Day, only includes taxes collected in their math, completely ignoring the total level of government spending. At some point those deficits must be paid back, either in reduced government services relative to what we pay or higher taxes.
When we look at government spending, rather than the tax burden, the date gets pushed back even further. We’re talking way back. If the government were to collect enough taxes to pay for its reckless spending binge, Tax Freedom Day would not arrive until May 23, meaning the average American would have to work an incredible 41 more days to pay off their total tax burden.
Unless something is done to get government’s spending problem under control, Tax Freedom Day will continue to fall later, and later, in the year. Medicare, Medicaid, Social Security, and other government spending will continue to shoot upwards, posing an ever-greater threat to taxpayers as deficits become unsustainable.
Fortunately, House Republicans, led by Budget Committee Chairman Paul Ryan, have a plan to solve these problems (Read what NTU had to say about their plan, a “Path to Prosperity” HERE). While not perfect, the Republican’s budget proposal would put us on a path toward a more fiscally sustainable future without placing additional burdens on taxpayers. Who knows, if we pass a “Path to Prosperity”, Tax Freedom Day may actually come early enough in the year to be worth celebration. As of now, I’ll save the money I’d spend on a Hallmark card for my tax bill.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Durbin to Introduce Internet Sales Tax Bill
This just in: According to CNet News.com, Illinois Senator Dick Dubrin plans to introduce a bill that would require busineses to collect and remit sales tax on remote sales. Wyoming Senator Mike Enzi is expected to co-sponsor the legislation.
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Bills Hiring 100,000 Teaching Assistants and Cutting $39 Billion In Latest Tab
NTUF is hot on the heels of recently introduced legislation with cost estimates and descriptions in the most recent Taxpayer’s Tab. While releasing our final BillTally report for the 111th Congress in mid-March, we remained vigilant in getting you the bills sponsored and supported in the 112th Congress.
This week’s Most Expensive Bill would authorize the Department of Education to spend up to $1 billion for each of the next five years to employ 100,000 new teaching assistants. The paraprofessionals would help teachers with administrative support as well as help students with one-on-one instruction. The bill’s goal is to achieve a lower ratio of school workers to students. School districts who already have met the requirement (mentioned in the Tab) may use funds to help currently employed aides in obtaining teaching licenses or furthering their professional development.
Bills in Issue 10 of The Taxpayer’s Tab include:
Big Ten Budgets
There is some big news coming out of the Big Ten, but it has nothing to do with sports and everything to do with budgets. The news is that the governors of the states of Michigan, Ohio, and Pennsylvania have released their first budgets, all of which do not use tax increases to balance their books.
Two issues that the National Taxpayers Union has long worked on demonstrated just how huge a political impact they can have yesterday.
Tax hikes and out-of-touch public employee compensation led Miami-Dade Mayor Carlos Alvarez to his downfall as his constituents voted at a nearly 90% clip to recall him. In the name of plugging a budget gap, the two-term Mayor pushed a property tax increase on the people of Miami-Dade County in the middle of the lingering recession. Yet, he then handed his aides and other public employees increased salaries.
Alvarez further abused taxpayer resources by using public employees to campaign for him, rather than stay at work.
Ultimately, this is a reminder that raising taxes in the midst of recession will cause major political blowback. Public servants, be it executives or legislators, must realize we have an overspending problem in America, not a revenue problem. Taxpayers should not serve as a bailout fund to insulate unrealistically compensated public servants and public employee unions from the economic challenges that citizens face on a daily basis.
You can read more on this story in the Miami Herald.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Tobacco Tax Craziness
Once again, it’s budget season in state capitols across the country. And, once again, we see some lawmakers and interest groups pushing proposals to raise tax rates on cigarettes and other tobacco products under the guise of a “cure all” for the state’s fiscal woes, despite their well-known problems that argue against enactment.
In the time it takes you to read this blog post, the federal government will have racked up an additional $10 million in debt that will be passed along in higher burdens on our children and grandchildren. Learn about what conservatives in Congress are doing it to stop it by joining us for a tele-townhall event with Representative Paul Ryan (R-WI), Chairman of the House Budget Committee and the innovative fiscal conservative behind the “Roadmap for America’s Future.” NTU President Duane Parde will be hosting the 30 minute call with Dick Armey, Chairman of FreedomWorks, and you’re invited to hear the latest breaking news and ask questions! Join us and thousands of other activists on the call at 6pm Eastern time Wednesday, March 9th by dialing 1-888-886-6603, extension 16307#.
Our national debt has reached a staggering $14 trillion, and our deficit alone from this year is as big as the entire budget of 1998. Congress has been working on a spending bill for the rest of 2011, but even modest spending reductions amounting to less than four cents out of every dollar of overspending have been rejected by Washington liberals. In the coming weeks we’ll begin debate on the budget for 2012, so it has never been more important for you to make your voice heard on Capitol Hill.
Our tele-townhall will be a great chance for you to hear from a Representative Paul Ryan, who as the head of the House Budget Committee is right on the front lines of the battle to reduce spending and create a sustainable budget. Join us and learn about not only the dangers our debt poses, but also what conservatives in Congress plan on doing to stop it. At 6pm Eastern time Wednesday, March 9th, dial 1-888-886-6603, extension 16307# to join this important call.
We hope you’ll join us as we get the latest information on the upcoming showdown over spending.6 Comments | Post a Comment | Sign up for NTU Action Alerts
Does NC really want a cigarette tax hike?
The Fay Observer reports that a new poll released by the North Carolina Alliance for Health shows Tar Heels appear to overwhelmingly support a $1 per pack tax increase on cigarettes to help close the state’s budget deficit. According to a news release from the Alliance:
“While 62 percent support increasing the tobacco tax as a budget balancing measure, support jumps to 66 percent when some of the revenue is used to fund public health measures. Strong majorities opposed other options such as reducing funding for education, Medicaid health services, closing state prisons or increasing other taxes.”
The Alliance also said the tax hike would generate $338.4 million in new revenue.
While these numbers may sound impressive, they overlook some relevant facts. First, cigarette taxes are notoriously unreliable sources of revenue. The projection that North Carolina will see a windfall of more than $300 million does not account for the losses of revenue that will surely result from higher taxes as smokers seek out cheaper alternatives from other lower-tax jurisdictions or smugglers. Second, there is no guarantee that the revenue raised will go to health care or any specific program. In many cases, state officials frequently divert tobacco tax revenues for uses other than their intended purpose. Third, history suggests that tobacco tax hikes are prelude to other tax increases. If the pollster had mentioned these facts, I’m fairly certain the poll would produce a different result.
In my view, one poll is not a good indicator of the overall mood among the public. A poll is a snapshot of public opinion at the time. A much better indicator is election results. Last November, North Carolina voters choose Republican majorities in both houses of the State Legislature for the first time since Reconstruction. Most importantly, those majorities campaigned on a platform to forego from or reduce higher taxes. This stunning result would appear to suggest that Tar Heels are not keen on tax hikes.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Fair Tax Act, Gun Control Bill Highlighted in Latest Tab
After our entitlement reform panel at CPAC and releasing our report on the President’s FY 2012 budget, NTUF has a new Taxpayer’s Tab with four newly scored bills. We’ve got a lot of research going on at the Foundation so be sure to keep up-to-date with @NTUF and be even more sure to support NTUF so we can get you the information you’ve come to expect!
One of the issues that have surfaced in the 112th Congress is tax reform. Many legislators are calling for tax simplification while others support a different stance: system replacement. The Fair Tax is one of those system alternatives that has gained more attention in the last few years. NTUF scored the Fair Tax Act at an $11 billion annualized savings. Check out the full Fair Tax description and how NTUF estimated the savings in the latest Tab edition.
Scored bills in Issue 6 of the Taxpayer’s Tab include:
Wireless Taxes on the Rise
Most of us know that wireless phones are indispensible tools for businesses and individuals today. Unfortunately, it does not appear that most elected officials got the message to that effect.
A new report published in State Tax Notes shows that, after several years of relative stability, taxes and fees on wireless service are on the rise again. Wireless users now pay a combined federal, state, and local tax and fee burden of 16.3%, twice the rate of the average retail sales tax and the highest wireless rate in six years.
Nebraska, with a combined rate of 23.69%, continues to hold the dubious honor of “the nation’s highest wireless tax state,” followed by Washington (23%), New York (22.83%), Florida (21.62%), and Illinois (20.90%). The states with the lowest combined wireless tax rates are Oregon (6.86%), Nevada (7.13%), Idaho (7.25%), Montana (11.08%), and West Virginia (11.28%).
According to Scott Mackey, the economist who authored the report, most states have not increased wireless-specific rates, but rather have expanded sales taxes to more wireless services and goods. But at the same time, many local governments have aggressively imposed new and higher taxes and fees on wireless users. For example, the City of Baltimore and Montgomery County, both in Maryland, raised the per-line tax by 50 cents and $1.50, respectively, a burdensome cost for families who use multiple phone plans. Additionally, the City of Lincoln, Nebraska increased the business telecommunications license tax from 5.5 to 6 percent, which means that someone spending $48 per month on wireless service (the industry average) pays $11.35 just in taxes, fees, and surcharges before paying the cost of the service.
With states and cities in fiscal dire straits, there will be
a strong temptation to raise wireless taxes and fees. This is a shame because
as wireless taxes and fees increase, the cost of using those
goods and services also increases, which could slow economic activity.
Fortunately, as wireless consumers learn more about the tax burdens they must
pay, they have become more outspoken against higher burdens to pay for reckless
spending by government. Hopefully, this new report will encourage more
consumers to speak out and elected officials will finally get the message.