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Durbin to Introduce Internet Sales Tax Bill
Posted By:  - 04/12/11

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. 

 

In case you were wondering, NTU has a history of opposing such legislation at the federal and state levels.

 

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Bills Hiring 100,000 Teaching Assistants and Cutting $39 Billion In Latest Tab
Posted By: Dan Barrett - 03/30/11

Tab Insert

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:

  • HR 646, A bill to authorize the appropriation of funds to be used to recruit, hire, and train 100,000 new classroom paraprofessionals in order to improve educational achievement for children
  • S 164, Withholding Tax Relief Act of 2011
  • HR 998/S 555, Student Non-Discrimination Act of 2011
  • S 253, A bill to establish a commission to ensure a suitable observance of the centennial of World War I, and to designate memorials to the service of men and women of the United States in World War I
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Big Ten Budgets
Posted By:  - 03/17/11

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.

In Michigan, Governor Rick “One Tough Nerd” Snyder kicked things off by releasing a budget that aims to close a $1.5 billion deficit without tax hikes. The bulk of his budget is reductions in spending to keep the budget manageable, as businesses and families in Michigan have done to weather this recession. Additionally, Snyder, a former executive with Gateway computers, aims to reform the state’s tax code to lower rates for Michiganders and attract businesses. Snyder proposes to lower the personal income tax, saving taxpayers $122 million over the next two years. He also wants to eliminate the burdensome Michigan Business Tax and replace it with a corporate tax set at a rate of six percent. 

Meanwhile, Ohio Governor John Kasich, who like any good Buckeye is not going to be outdone by a Wolverine, released a two year budget earlier this week to close an $8 billion deficit by reducing aid to cities, reforming Medicaid, requiring merit pay for teachers, and selling state prisons to private operators. To reduce the costs for cities that lose aid, Kasich would make it easier for local governments to share services and reform wage and bargaining laws for public workers. Additionally, Kasich wants to convert Ohio’s state-run liquor distribution business into a public-private partnership. Kasich, a former Member of Congress who once served as chair of the House Budget Committee, knows a thing or two about how budgets work and what it takes to get them adopted.

Rounding out Big Budget News from the Big Ten is Pennsylvania, where Governor Tom Corbett released a budget that did not spare any government function from reform to close a $5 billion budget deficit. Perhaps the biggest change in the budget – and in Pennsylvania – is a reduction in basic education to the 2008-2009 spending level, a government function that has not seen a reduction in 20 years. Further, Corbett, a former prosecutor who hails from the Western part of the Commonwealth, proposes to give more control over school budgets and the property tax rates that pay for schools to, respectively, local school boards and voters.

Budgets are all about priorities for the state governors. According to their budgets, the priorities for the governors of these three very important and large states are getting their fiscal houses in order. All of these governors are telling us that they believe, correctly, the path to fiscal sustainability is through lower taxes and more manageable budgets, not higher taxes to finance more spending on big government. But while governors are important people, they are only one player on the field we know as government. The legislatures will have the final say on these budgets. If history is any guide, the legislatures will have some “suggestions” (aka higher taxes, more spending, etc.). Let’s hope that these governors do not yield to their opponents because this budget game is one

But for starters, these three governors and their budgets can’t be beat. If the state budget season were a basketball tournament, all of these states would deserve to get number one seeds.

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Tax Increase Terminates Scandal Plagued Mayor
Posted By: Douglas Kellogg - 03/16/11

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.

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Tobacco Tax Craziness
Posted By:  - 03/11/11

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.

Right now, we are being told that these sin tax hikes are a “Win, Win, Win” for the states. It seems as though every day these days, we see new poll results – typically funded by proponents of the tax hikes – informing us that “the vast majority” of taxpayers support higher cigarette and tobacco taxes, as opposed to budget cuts, to save the state.

Unfortunately, governors and lawmakers across the country have their blinders on, and are taking up these proposals. In Connecticut, Governor Dan Malloy has proposed a 40 cent per pack cigarette tax increase as part of his budget. Georgia’s tax reform commission proposed a 37 cent per pack tax hike; some want a $1 per pack increase! A senior lawmaker in Idaho wants to raise the state’s cigarette tax $1.25 per pack. Even Oklahoma is trying to get in on the tax hike game by considering a bill that would give economic development power to local government, which includes regulation of tobacco through new fees. West Virginia also has been trying, but thus far failing, to move a major tax hike through its legislature. Now, tax hike advocates are pushing opinion polls and proposals to raise taxes in North Carolina, Nebraska, and Montana, in some cases substantially. But that’s not all: there are now rumors that Illinois could try again to raise its cigarette tax (I guess raising Illinoisans’ income tax by 67% just isn’t enough when you fail to reduce spending).

But all of these proponents of cigarette and tobacco tax hikes are consciously ignoring the well-known problems associated with these sin taxes. Since the poor are more likely to smoke, tobacco taxes tend be paid most by the poor rather than the rich, Mercedes-driving country club members who work on Wall Street that seem to be the target of every tax hike since the dawn of time. Higher tobacco taxes are also costly to retailers, especially convenience stores, who count on cigarettes, chewing tobacco, and other products for as much as a third of their sales. What’s worse, several states that raised their tobacco taxes have reported shortfalls. I’m not sure how anyone thinks a state would “win” by raising a tax that drives business and tax revenue out of the state. But perhaps the most alarming development is that these problems are not new discoveres. In fact, we here at NTU (and countless others in the fiscal policy world) have been highlighting these problems for years. Yet, here we are again, making the same arguments because tax hike proponents and lawmakers cannot (or perhaps do not) wish to acknowledge reality.

Albert Einstein has been quoted as saying that the definition of insanity is doing the same thing over and over again, and expecting a different result. Given these organizations’ and lawmakers continued desire to raise taxes on cigarettes and tobacco products despite the well known problems with these types of taxes, it shouldn’t come as a surprise why the public thinks most politicians are crazy.

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Join us for a Tele-Townhall with Paul Ryan!
Posted By: Andrew Moylan - 03/07/11

 

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.

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Does NC really want a cigarette tax hike?
Posted By:  - 02/27/11

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.

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Fair Tax Act, Gun Control Bill Highlighted in Latest Tab
Posted By: Dan Barrett - 02/24/11

Tab Insert

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:

  • HR 301, New Manhattan Project for Energy Independence
  • HR 25/S 13, Fair Tax Act of 2011
  • HR 308/S 32, Large Capacity Ammunition Feeding Device Act
  • HR 365, National Blue Alert Act of 2011
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Wireless Taxes on the Rise
Posted By:  - 02/16/11

 

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. 

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Reflections on CPAC
Posted By:  - 02/12/11

Today is the third and final day of the 2011 Conservative Political Action Conference (CPAC), the largest annual gathering of conservatives and libertarians in the nation. After three days of staffing a well-visited booth, meeting with dedicated activists, and listening to dynamic speakers, I’m looking forward to some rest and relaxation, but also to what the future holds for the conservative movement.

This year’s CPAC had the highest number of attendees (11,000) in the history of the conference. CPAC speakers ranged from Rep. Paul Ryan of Wisconsin, the House Budget Committee Chair, to Governor Mitch Daniels of Indiana, a potential presidential candidate who gave, in my view, an outstanding keynote address, which you can read here. Also, CPAC 2011 featured a number of new participating organizations that focus on both activism and policy related to social, economic, and political issues at the federal, state, and local levels.

While attending CPAC, I had the opportunity to participate in a number of discussions about important tax and fiscal policy issues facing the United States. NTUF hosted a discussion about entitlement reform that featured experts such as Rep. Devin Nunes, Maya MacGuineas, Douglas Holtz-Eakin, Steven Moore, and Dan Mitchell. The bottom line of their presentation was that we need to start tackling the problem of runaway entitlement spending before it’s too late.

But budget reform should not be restricted to social programs. CPAC also featured a panel on how the nation can reduce defense spending to a more manageable level without jeopardizing readiness. As a former military aide to a fiscally conservative Member of Congress, I was pleased to hear all of the views presented and the many ideas for maintaining an affordable defense posture. The passion the attendees displayed at the panels, and in conversations with me at the NTU table, was striking.  It bodes well for conservatives if these activists carry their views home and remain outspoken and active in the political process.

For the last several weeks, there has been a lot of talk in the media about differences in the conservative movement over certain policies and suggestions that these differences spell certain doom the conservative movement.  After three days of observing conservatives of all stripes from across the country, I can unequivocally say that reports of destructive differences among conservatives are greatly exaggerated. In fact, I would argue that the conservative movement has never been stronger and ready to bring real solutions to the many serious problems facing the nation.

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