Read more about the article To Boldly Go Where No Tax Dollars Have Gone Before

To Boldly Go Where No Tax Dollars Have Gone Before

During one of the most challenging fiscal times in the United States unemployment spiked and citizens were told by bureaucrats and politicians to be smart about how they spent their money. It appears that the government officials weren’t taking their own advice. In 2010, the Internal Revenue Service (IRS) funded two “training” videos that cost taxpayers $60,000. The problem is that these taxpayer-funded training videos involved Star Trek and Gilligan's Island parodies.It’s a toss-up between what’s most offensive. The fact that the government found it appropriate to fund a six minute video of IRS agents or the text of the parody that asserts the IRS’ “never-ending mission to seek out new tax forms, to explore strange new regulations…”

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Read more about the article Net Neutrality Takes A Hit As FCC Chairman Steps Down

Net Neutrality Takes A Hit As FCC Chairman Steps Down

The net neutrality world is all-abuzz with the announcement that Federal Communications Chairman (FCC) Julius Genachowski is retiring. According to The Hill, “The net neutrality rules were one of the defining achievements of the tenure of Chairman Julius Genachowski,…” That is not a good legacy and should not be considered an “achievement.” “Net neutrality,” which is loosely defined as a system that allows information on the Internet to move freely without regard to content, is in reality a not so subtle attempt to regulate the Internet and the next Chairman will determine the fate of net neutrality. The Hill also noted that, “Berin Szoka, the president of libertarian think tank TechFreedom, said he hopes the next chairman abandons the fight over net neutrality. ‘I am mystified why we have spent the last seven years arguing about net neutrality,’ Szoka said. He argued that the Federal Trade Commission's existing authority to police anti-competitive and deceptive business practices is sufficient to address potential net neutrality abuses.” The truth is that the Internet has thrived because government has, up until now, kept a light regulatory touch on the Internet. Quick reacting business and free market forces will keep the Internet thriving, not slow unresponsive government bureaucracies. A new regulatory regime for the Internet will stifle innovation and cost taxpayers millions of dollars in a newly created bureaucracy.

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Read more about the article Minnesota Governor Still Trying To Raise Taxes

Minnesota Governor Still Trying To Raise Taxes

If you think taxes are high where you live, wait until you hear about what some Minnesota residents may soon be paying. Significant tax hikes on tobacco and other products are included in Minnesota Governor Dayton’s proposed budget. According to Duluth News Tribune, “Gov. Mark Dayton, in both his initial budget proposal in January and in his revised spending pitch last week, called for increasing the state’s current tobacco tax of $1.23 per pack by another 94 cents. Other legislative proposals would jack up the tax by anywhere from $1.29 to $1.60 more per pack. Duluth’s Democratic Rep. Tom Huntley has proposed a $1.50 increase. A $1.29 tobacco tax hike would put Minnesota on par with neighboring Wisconsin.” That increase is expected to raise an additional $365 million for the state budget over two years. Unfortunately, these revenue expectations tend to be Fool’s Gold. The Minnesota State News pointed out that “Since 2003 there have been 57 cigarette tax increases across the nation and 68% of them have failed to meet projected revenues. In 2006, New Jersey raised cigarette taxes with the hope of pulling in $30 million in extra revenue each year. Not only did the tax hike fail to bring in extra revenue, but the state actually collected $20 million less in cigarette sales.”

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Read more about the article Marketplace Fairness Act Must Be Defeated

Marketplace Fairness Act Must Be Defeated

The Senate will be voting on legislation this week that will be, according to Andrew Moylan at R Street Institute, "paving the way for expanded state sales tax collection for online purchases." Also, according to Moylan, "On the occasion of the first Senate budget resolution in more than four years, Sen. Durbin is likely to introduce a 'deficit neutral reserve fund' amendment that is essentially a proxy for his bill, S. 336. Despite what its supporters claim, this legislation is bad news for conservative principles and limited government." That is why the Taxpayers Protection Alliance was proud to sign a letter with with 15 other taxpayer and free market groups to oppose S. 336, the “Marketplace Fairness Act.” S. 336 would countenance an enormous expansion in state tax collection authority by wiping away the “physical presence standard,” a baseline protection that shields taxpayers from harassment by out-of-state collectors. The bill would create a decidedly “unlevel” playing field between brick-and-mortar and online sales. Brick-and-mortar sales across the country are governed by a simple rule that allows the business to collect sales tax based on its physical location, not that of the item’s buyer. Under the “Marketplace Fairness Act,” that convenient collection standard would be denied for online sales, forcing remote retailers to interrogate their customers about their place of residence, look up the appropriate rules and regulations in thousands of taxing jurisdictions across the country, and then collect and remit sales tax for that distant authority.

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Read more about the article A Century Of Tax Misery

A Century Of Tax Misery

As taxpayers feel the hangover of yet another tax day, a history lesson on the tax system is in order. One hundred years ago this year, the states ratified the 16th Amendment allowing the federal government to "have power to lay and collect taxes on incomes." Within months, Americans were filling out the first income tax forms. In the 1913 tax year, no one who made less than $20,000 -- the equivalent of $458,000 in today's dollars -- paid a dime in income tax. Now Americans earning $458,000 typically fork over $181,368 in federal income taxes. A century ago, the federal income tax brackets ranged from 1 percent to 6 percent, and that 6 percent top tax rate only applied to those fortunate enough to earn $500,000, or $11.4 million in 2013 dollars. Now, marginal tax rates range all the way up to 39.6 percent and the lowest tax bracket is 10 percent. Some low-income Americans today pay a higher percentage of taxes than the wealthiest taxpayers in 1913. In today's dollars, the first Tax Day -- the deadline for filing federal income tax returns -- after the implementation of the national income tax brought in $16.6 billion. This year, the income tax will take $2.7 trillion from hard-working Americans.

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Read more about the article This Tax Certainly Needs To Be “Bagged.”

This Tax Certainly Needs To Be “Bagged.”

How could anyone be against a plastic bag ban? It’s a great way to save money while saving the environment, right? If this statement were true the government wouldn’t have to prohibit people from using a plastic bag, people would choose to do so without coercion. The shortcomings of the Washington, D.C. bag tax are numerous due in part to the ill-conceived premise of banning or taxing a consumer’s choice to use a plastic bag. In March 2012, TPA noted the shortcomings of the bag tax. D.C.’s experience has been a complete failure. According to a report by Americans for Tax Reform and the Beacon Hill Institute, “the bag tax will result in the elimination of more than 100 local jobs and precipitate a $5.64 million decline in aggregate disposable income for 2011. The majority of this income would have been spent in the District and, as a result of the bag tax, D.C. will now needlessly forgo an additional $108,340 in sales tax revenue and will see investment drop by $602,000, with the bulk of the loss occurring in the retail sector.” The obvious scenario is that people will shift their purchasing behavior to patronize stores that are outside the geographical area of the tax. Seattle’s local government went even further; instead of taxing the bags, it out right banned them.

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Read more about the article More Wasted Stimulus Tax Dollars, This Time In Michigan

More Wasted Stimulus Tax Dollars, This Time In Michigan

Although the current state of the federal government comes up short a lot of the time, there are a few redeeming glimmers of hope every now and then. More times than not, those glimmers come from an entity of government that’s asked to check up on, monitor, and audit other components and arms of the federal government. These beacons of fiscal responsibility are the Inspector Generals (IGs). IGs are extremely helpful to taxpayers for a variety of reasons, and they certainly strike a fear in whichever agency that’s the one under the microscope. For example, just recently the Department of Energy’s (DOE’s) IG found that a “Michigan battery-maker that received a visit from President Obama spent hundreds of thousands of dollars in stimulus grant money for workers to do things like watch movies and play cards, according to an inspector general report that blames poor management by the Energy Department. The wasted labor is a system of more widespread mismanagement of the company’s $151 million matching grant…”

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Read more about the article EARMARK ALERT: Sens. McCain and Coburn Uncover $500 Million In Earmarks In Continuing Resolution

EARMARK ALERT: Sens. McCain and Coburn Uncover $500 Million In Earmarks In Continuing Resolution

It seems as though the more things change, the more they stay the same. Sens. John McCain (R-Ariz.) and Tom Coburn (R-Okla.) today released a list of earmarks worth more than $500 million added to the FY 2013 Continuing Resolution that is slated to fund the government for the rest of the year. With a $16.7 trillion debt and a deficit eclipsing the $800 billion mark, the Senate should be ashamed for adding more these earmarks to the FY 2013 Continuing Resolution. Earmarks have been the bribery currency of Congress for many years, as both parties used them to buy votes, bring federal dollars to their district and ultimately get re-elected. Former members of Congress including Randy “Duke” Cunningham (R-Calif.) were sent to jail for accepting bribes to secure earmarks. Disgraced lobbyist Jack Abramoff also spent time in jail in connection with earmarks promised to clients.Earmarks circumvent established budgetary processes and procedures and further exacerbate taxpayers’ cynicism of Washington, D.C. Sen. Tom Coburn (R-Okla.) has called earmarks “the gateway drug to spending addiction in Washington.” In 2010, the House and Senate agreed to a two year moratorium on earmarks, yet there were reports of Congress backsliding on this promise - with earmarks being found in the fiscal year 2012 appropriations bills. It is time for Congress to be serious about eliminating earmarks for good by passing legislation like S. 1930, the Earmark Elimination Act, which was proposed in 2012 by Sens. Pat Toomey (R-Pa.) and Claire McCaskill (D-Mo.). S. 1930 would have permanently killed earmarks and given life to fiscal responsibility.

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Read more about the article TPA Joins Forces To Oppose S. 336, the “Marketplace Fairness Act.”

TPA Joins Forces To Oppose S. 336, the “Marketplace Fairness Act.”

On March 11, 2013, the Taxpayers Protection Alliance joined with 15 other taxpayer and free market groups to oppose S. 336, the “Marketplace Fairness Act.” S. 336 would countenance an enormous expansion in state tax collection authority by wiping away the “physical presence standard,” a baseline protection that shields taxpayers from harassment by out-of-state collectors. The bill would create a decidedly “unlevel” playing field between brick-and-mortar and online sales. Brick-and-mortar sales across the country are governed by a simple rule that allows the business to collect sales tax based on its physical location, not that of the item’s buyer. Under the “Marketplace Fairness Act,” that convenient collection standard would be denied for online sales, forcing remote retailers to interrogate their customers about their place of residence, look up the appropriate rules and regulations in thousands of taxing jurisdictions across the country, and then collect and remit sales tax for that distant authority.

Continue ReadingTPA Joins Forces To Oppose S. 336, the “Marketplace Fairness Act.”
Read more about the article Kentucky Legislators Shouldn’t Bail Out Pensions With A Tax On Workers and Smokers

Kentucky Legislators Shouldn’t Bail Out Pensions With A Tax On Workers and Smokers

This post was written by TPA President David Williams (not the former Kentucky state senator) and Caleb O. Brown, a researcher at the Bluegrass Institute. Every year state legislatures take a close look at their books to decide how to address budget gaps. Taking the lazy (and costly) road, many states have tried to raise taxes to address budgetary shortfalls, and Kentucky is no different. State Rep. Jim Wayne has proposed to “reform taxes,” to bring in more revenue. The truth is that Wayne’s reforms are thinly-veiled tax increases that are supposed to raise about $815 million per year in additional tax revenue. As part of his proposed tax increases, Wayne wants to raise the income tax rate from 6 percent to 6.5 percent for persons with adjusted gross income of $150,000 or more and increase the cigarette tax from $.60 per pack to $1.6 per pack, a 167 percent increase. Before Kentucky legislators ask for one more nickel in extra taxes, wasteful and bloated government spending needs to be addressed. The biggest area of concern for Kentucky state legislators should be the state’s unfunded public pension liability, which is estimated to be a staggering $34.5 billion. And even that figure likely understates the size of the pension liability given how generously the government’s actuaries discount pension liabilities.

Continue ReadingKentucky Legislators Shouldn’t Bail Out Pensions With A Tax On Workers and Smokers