The Policy and Commentary Blog of The Heartland Institute
John is the Budget & Tax Legislative Specialist for The Heartland Institute. Prior to joining Heartland he was the National Press Coordinator for Americans for Fair Taxation, one of largest grassroots tax reform organizations in the country. His commentaries have appeared in publications such as the Chicago Tribune, Milwaukee Journal Sentinel, Detroit News, Chicago Sun-Times, Investor's Business Daily, and American Spectator Online.
Recently “Color of Change,” Common Cause, the Center for Media and Democracy, and other extreme leftist groups’ have attempted to defame a group called the American Legislative Exchange Council (ALEC). These attacks are not surprising considering the groups that are making them. Rather than discussing and debating actual policy, these groups resort to ad hominem attacks and bullying tactics. What is downright shameful is their use of a tragedy like Trayvon Martin’s death to dishonestly attack an organization with which they disagree on policy.
Like ALEC’s corporate donors, The Heartland Institute’s supporters are under fierce attack by the same left-wing groups using the same tactics. While “Color of Change” uses the Trayvon Martin tragedy as cover for its ideological campaign, “Forecast the Facts” and its allies are using our efforts to bring sound science to the debate over global warming. Such tactics have no place in the national debate over public policy.
Despite what these fringe groups want you to believe, ALEC is not involved in any black helicopter conspiracy. ALEC is in fact a very effective and respected public-private partnership that brings together state legislators, members of the private sector, the federal government, and general public to openly discuss public policy and free-market solutions. It does not hide that its stated mission is to advance “Jeffersonian principles of free markets, limited government, federalism, and individual liberty.”
As Georgia Senate Majority Leader Chip Rogers put it, “I stand with ALEC, and together we stand ready to defend our guiding principles of free markets and limited government, which is what our nation needs now more than ever.”
The Heartland Institute stands with ALEC in support of free enterprise, limited government, and federalism, and asks that you do so as well.
One of the most dreaded days of the year is approaching … tax day. This year Tuesday, April 17 will be the last day people can file their taxes. It is also the Tax Foundation’s Tax Freedom Day, which calculates that Americans had to work more than a quarter of the year just to pay all the nation’s taxes for the year.
According to the Tax Foundation, Tax Freedom Day arrives “four days later than last year due to higher federal income and corporate tax collections. That means Americans will work 107 days into the year, from January 1 to April 17, to earn enough money to pay this year’s combined 29.2% federal, state, and local tax bill.”
The Tax Foundation says that it “is a vivid, calendar-based illustration of government’s cost, and it gives Americans an easy way to gauge the overall tax take. Conceived by Florida businessman Dallas Hostetler in 1948, he deeded the concept to the Tax Foundation upon his retirement in 1971. In 1990 sufficient data became available to calculate a separate Tax Freedom Day for each state.”
Apparently a bipartisan collection of Oregon state lawmakers “doesn’t want to give you up.” This was actually planned and all but one legislator agreed to say part of the lyrics to the classic 80′s Rick Astley song concealed in regular floor speech.
Since all floor speeches are recorded the words and phrases were later strung together to make the entire song. The production ends with this disclaimer: “No bills were harmed in the making of this video. No public dollars were spent.”
A few weeks ago Connecticut passed a budget containing $2.6 billion in tax hikes on alcohol, tobacco, hotels, sales, and estates. At that time Governor Dannel Malloy “demanded” $2 billion in concessions from the public employee unions. Fast forward to this week…On Tuesday it was announced that the Governor only got $1.6 billion in concessions spread over the next two years and has precariously locked state taxpayers into a sweetheart union agreement that will run until 2022.
In short, the state agreed to take more money from the pockets of state’s taxpayers in order to further protect government employees and the public union’s political coffers for years to come.
Union negotiator Dan Livingston was quoted in the Connecticut Post as saying that “the toughest concession, in terms of money coming directly out of workers’ pockets, is a two-year wage freeze worth $138.8 million in 2012 and $309.5 million in 2013. In return, Malloy agreed to three percent raises each of the following three years and a four-year, no-layoff guarantee for current SEBAC employees.”
My colleague at The Heartland Institute, Eli Lehrer wrote a rather controversial op-ed for the Weekly Standard recently arguing that “Pensions Aren’t the Problem.” Eli’s piece makes some good points in regards to the public pension debate and has, if nothing else, brought more attention to this important issue. The biggest flaw in his argument is that he fails to acknowledge that if states have any chance of fundamentally fixing their state’s budgets long term, then they must address their pension systems in the short term.
Ignoring this rapidly growing and unsustainable taxpayer liability, and refusing to restructure pensions while states are struggling to balance their budgets, would be a missed opportunity for long-term fiscal health. Eli’s pragmatic approach to solving state budget deficits may seem like good politics and might encourage healthy debate, but in the end it is bad for taxpayers. The facts are clear, this is conservatively a trillion-dollar problem facing states, and these unfunded pension liabilities will continue to worsen as budget deficits grow and legislators fail to restrain current and future expenditures.
After decades of increasing tobacco taxes at the federal, state, and local levels, some states are beginning to buck this fiscally burdensome and irresponsible trend.
On March 17, the New Hampshire House of Representatives passed a bill that would cut the state’s cigarette tax by a dime, to $1.68 per pack. Two other states with high tobacco taxes—New Jersey and Rhode Island—are also considering proposals to reduce taxes on tobacco products to make their state’s tax rates more competitive.
This reversal in policy would be fiscally responsible and especially beneficial to low-income people.
Republican Senators in Georgia are blocking a vote on a proposal that would allow local communities the option to let retailers sell alcohol on Sundays.
Currently Georgia is one of only three states that prohibit the retail sale of liquor, wine, and beer on Sunday. Despite this outdated regulation the state does surprisingly allow alcohol to be sold on Sundays at bars and restaurants.
Heartland’s friend and President of American’s For Tax Reform, Grover Norquist sent a frank letter to the Georgia legislature earlier this week in support of the local option. In it Grover rightly takes these “conservative” lawmakers to the woodshed. He writes,
“The small handful of senators that seek to preserve the status quo by blocking an open debate on the matter of Sunday sales referenda are effectively supporting greater government regulation and unnecessary intervention in the private economy – which Georgia voters issued a resounding rebuke of last November. Worse, opponents of SB 10 and HB 69 are opposing common-sense legislation that would reduce the threat of tax increases on Georgia families and employers.”
Yesterday our friends at the Tax Foundation released their annual State-Local Tax Burden study which highlights what state’s taxpayers are facing the highest and lowest tax burdens in the country. This study not only takes into consideration the state and local taxes you pay where you live but also what you may pay to other states when you shop, travel, or work in other states.
Some of the highlights from the report include:
Taxpayers in New York, New Jersey, and Connecticut bore the highest South Dakota, Nevada and Alaska experienced the lowest, under 8%. state-local burdens in the country at over 12%, while residents in
The nation as a whole paid 9.8% of its income in state and local taxes, down slightly from 9.9% in 2008 and down significantly from 10.4% in 1977, the earliest year for which the Tax Foundation has done such estimates.
While it is useful and informative to look at the national trend, burdens among the states can vary widely. Taxpayers in high-tax New Jersey, for example, pay almost twice the state-local tax rate (12.2%) as those in Alaska, the state with the lowest burden (6.3%).
Many taxpayers themselves are unaware of how much of their state and local tax burden is paid into the coffers of states other than their own. Alaska, for example, is able to shift almost 80 percent of its tax collections to residents of other states.
No real surprises with New Jersey at the top and Alaska at the bottom but there has been some jockeying with the other states in the middle. Unfortunately for The Heartland Institute we have just started having to pay a higher tax here in Illinois due to lame duck tax hikes passed on internet purchases, businesses, and income. How is your state doing? Have high taxes ever driven you away from a high tax state like New Jersey to a lower taxed state such as Texas or Nevada?
Earlier today the Illinois legislature voted to implement an “Amazon” tax which places a 6.25% sales tax on purchases from retailers that have affiliates located within the state.
Hours later Gov. Pat Quinn and top Democratic leaders apparently reached an agreement to also raise the state’s income tax by 75-percent and more than double the state’s cigarette tax. Taxpayers shouldn’t worry too much however since the income tax hike portion will purportedly only be “temporary” (insert sarcasm).
Each of these three hikes would produce significant negative effects for Illinois taxpayers as well as local businesses.
The “Nanny Staters” have been busy recently. Two weeks ago, the San Francisco city council vote to ban the sale of McDonald’s Happy Meals; then last week we had the FDA present the new graphic warning labels for tobacco packaging that are aimed to help educate the public about the dangers of smoking (since no one knows them already?); and now it is expected that the FDA will ban the sale of caffeinated alcohol beverages, such as Four Loko.
Senator Chuck Schumer (D-NY) was the first politician to comment on the FDA’s upcoming decision that it is unsafe for caffeine to be added into alcoholic beverages by stating that, “Parents should be able to rest a little easier knowing that soon their children won’t have access to this deadly brew.”
Well if by children he means high school age (18) or younger then by law they don’t have the legal right to drink as it is. Now I’m not naïve to think that underage kids don’t find illegal ways of getting their hands on alcoholic beverages, but if they can’t get Four Loko, they will just get a different alcoholic beverage or possibly a more dangerous substance.
In typical of government fashion, the upcoming ban on Four Loko and similar products is yet another case of government feeling the need to “do something” in order to counteract a few individuals who made bad decisions. This is the usual knee jerk reaction when headlines are made from citizens who are experiencing the consequences of their own actions. These tragedies are quite unfortunate, but it is hard to say that they wouldn’t have occurred even with the ban in place.
