Obama Breaks Promise with Tanning Tax

"I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes." - Barack Obama, September 12, 2008, Dover, New Hampshire.

Another broken tax promise from Barack Obama:

Those wishing to cloak themselves in tanning-bed bronze are paying more for the service these days, thanks to a new federal tax that proprietors began collecting this month.

Money collected from the tax goes to help fund the nation's new healthcare program, an effort to provide health insurance for all.

About 18,000 mom-and-pop businesses across the country will have to collect the tax.

"This tax is a on group of people who are not big wage earners," said Overstreet "This is a recession. People are already hurting and cutting back on things like that."

In addition to having to charge their customers the tax or pay it themselves, those small businesses will have the burden of preparing the paperwork and will already have taken on the additional expense of updating their accounting process.

According to ITA, the Internal Revenue Service will collect $2.7 billion over the next 10 years with this tax.

Oh, but this is for healthcare. Still a broken promise:

His detailed campaign plan stated that his proposed improvement in health insurance and health technology "is more than covered" by raising taxes on the wealthy alone.

Dems blunder in attack on Nunnelee

First, the Democrats attacked Alan Nunnelee for raising taxes. We imagine they were upset, because raising taxes is their job, not Republicans. Second, it turns out one of their attacks was wrong. Way wrong. Backward. They attacked him for cutting taxes. Of course, that makes more sense as Democrats prefer higher taxes, so they ought to criticize a Republican for cutting taxes. But this time, they did that by accident: When a 'tax increase' is actually a tax cut

Democrats are going after Mississippi state Sen. Alan Nunnelee (R) for his record on taxes, but at least one punch didn’t land.

In a release this week, the Democratic Congressional Campaign Committee (DCCC) says Nunnelee, in 1996, “sponsored a bill to increase income tax rates and optional standard deductions according to changes in the U.S. inflation rate.”

What that bill cited actually did, though, was increase tax brackets according to inflation. That translates to a tax cut, rather than an increase. The bill at the time was being pushed by GOP Gov. Kirk Fordice, in order to reduce state income tax rates.

We fervently oppose tax increases and it is fair game to criticize those. But obviously, this was not one.

(Responding via Y'all Politics)

Butch Brown wants to hike your taxes

Butch Brown - the executive director of the Mississippi Department of Transportation through the support of MDOT Commissoners Wayne Brown and Bill Minor, both Democrats - wants to hike your gasoline taxes.

Charlie Mitchell writes about it.

An average Mississippi family may start shelling out that much more per driver in fuel taxes per year before too long. The stage is being set — artfully — to increase Mississippi’s excise tax by a nickel per gallon.

Building the case for an increase, among others, is Butch Brown, executive director of the Mississippi Department of Transportation. Assisting him in a loosely organized campaign are alliances of contractors. The companies that build bridges and construct, widen or resurface roads need the work, and MDOT needs the money to pay them.

Why does MDOT want more of our money? Mitchell speculates on that as well.

We also rank extremely high -- inexplicably, absent a belief there’s more than a little cash slipping through the cracks, so to say -- in what we pay per mile for road work as compared to other states.

Terrain is different and so are wages, but how does one explain a 1995 report to Congress that in Wisconsin the average wage on federally assisted highway projects was $15.55 per hour, more than twice Mississippi’s $6.69 per hour, yet the total construction cost per mile was $394,405 in Wisconsin and $641,238 in Mississippi?

Costs, not including “slippage,” continue to rise. Arkansas officially estimates it costs more than $100,000 per mile per lane this year for a good overlay job.

So Butch Brown and MDOT want to raise our taxes because we spend more per mile for road work than other states. Sounds like a management problem. Here's an idea, how about bringing costs under control before pinching more money from our pockets.

Maybe they could spend less of our taxpayer dollars (and on the special interest dime) visiting Budapest, Vienna, Brussels, Puerto Rico, Cancun, Key West, San Francisco, Walt Disney World (maybe they studied the monorail), Cape Cod, New York City and both country entertainment meccas Branson, Missouri and Opryland in Nashville.

Ethics Commission Chairman Tom Hood believes MDOT Commissioners Bill Minor and Wayne Brown violated Mississippi's open meetings laws (Butch Brown was there, too, but he is not a commissioner). Minor's response was one of confusion, as if he didn't know it was wrong. Perhaps that will be MDOT's response to the wasteful costs per mile of roads.

Greenwood, Cleveland papers support 27% gas tax hike

As we've discussed, Butch Brown at the Mississippi Department of Transportation is advocating a 27% gas tax hike. Lieutenant Governor Phil Bryant is opposed to it. And the Clarion Ledger has editoiralized agains it.

But the Greenwood Commonwealth and the Bolivar Commercial newspapers have both come out in favor of the gas tax hike.

The Greenwood Commonwealth not only advocates for the hike, but suggests that the legislation make it an automatically increasing tax every year.

The initial reaction when someone starts talking about raising taxes is a knee-jerk negative. That response is not just predictable, but understandable. People feel taxed enough already. In Mississippi, it takes on average almost three months of work to pay all of the state, federal and local taxes for the year -- and that’s a shorter time frame than in most parts of the country.

It will be said that, given the recession, this is no time to increase taxes. But when will there be a good time? When gasoline prices were $4 a gallon in 2008, it was said that was not a good time either. At least prices at the pump have moderated since then.

A better idea than the nickel increase would be to peg the excise tax to inflation, with an automatic adjustment every year. That way, the gas tax would keep up with the rising costs of road-building and repair.

The Bolivar Commercial calls it a "necessary evil."

We know that a tax increase is a politician’s most unfavorable task in Mississippi, and the public doesn’t think too highly of the idea either. One of Gov. Haley’s Barbour’s favorite expressions after he was elected, for example, was “No new tax increases.”

But sometimes—even in a recession—a tax increase is painfully necessary for the safety and well-being of our citizens. And we hope both Barbour and our legislators will realize the nickel increase on a gallon of gas is simply a necessary evil if Mississippi is to keep its infrastructure up to date.

Lets see...a 27% tax on a 50 cent newspaper is about 13.5 cents. Why don't we put a 13.5% tax on newspapers and send the revenue to education where one might argue the state is teaching people to read so they can consume the newspapers. Oh, and peg it to inflation so that newspaper tax increases with inflation. No one will notice. It will be a necessary evil.

Fight the Gas Tax Hike

As we mentioned earlier this week, Butch Brown, Director of the Mississippi Department of Tourism Transportation, wants to hike gas taxes by 27%. People are tired of higher taxes and taxing gas is not a wise move in this economy.

Lieutenant Governor Phil Bryant went on the record opposing the gas tax hike.

When Garret McDaniel heard the state gas tax could go up, his first reaction was, "Another tax?"

"We're already getting taxed on everything else," McDaniel continued. "Everything's going up. I can barely afford to get enough gas to afford to drive."

But state leaders, like Lieutenant Governor Phil Bryant, don't want to see the tax raised at all.

In a statement, Bryant said, "In these tough economic times, I am opposed to any further tax burden on the taxpayer."

The Clarion Ledger has also chimed in.

Now is not the time for a tax increase that would raise the price of gasoline.

Brown's call for higher gasoline taxes is highly unpopular and politically impossible in the current economic climate and rightly so. Higher gas prices, even a nickel higher, will have a negative impact on the economy. But it does make sense in terms of public policy.

In the short run, the benefit of a fuel excise tax hike isn't worth the economic pain.

But MDOT's fuel excise tax hike policy argument is forced to operate in the shadow of the two-on-one political standoff between the state's transportation commissioners. Mississippi needs attention to transportation issues that transcend the gas tax. The Legislature should make reforming that state function more of a priority.

Amen.

Butch Brown calls for 27% hike in gas tax

MDOT Executive Director Butch Brown, who used taxpayer dollars for trips to Puerto Rico, Brussels, Budapest and Vienna, now wants to hike gas taxes by 27% because he says MDOT is running out of money. On one hand, he says MDOT will soon be a maintenance-only department and on the other hand, he says the transportation expansion and improvement plan "Vision 21" is fully funded.

The executive director of the Mississippi Department of Transportation told a business group Friday that he supports a 5-cent-per-gallon increase in the gas tax to help fund the state’s road projects.

At the Community Development Foundation’s First Friday event, Larry “Butch” Brown said it’s “absolutely critical” that MDOT find new sources of income.

“If we don’t get new taxes, we’re going to be in trouble,” Brown said.

The primary source of state revenue for the Department of Transportation is an 18.4-cent tax on a gallon gas and diesel.

If MDOT doesn’t find new income, it will be a maintenance-only department in three years, he said.

However, Brown said after Friday’s event that “Vision 21 is already funded.”

Brown explained that MDOT’s originally proposed Vision 21 program – not the version passed by the Legislature – is funded.

“Once we complete the Vision 21 program as it was originally conceived, we will move forward with other projects,” Brown said.

Butch Brown spends money on building new offices around the state and manages a leviathon of bureucracy in Jackson. He spends MDOT money on trips around the world for himself. And in this recession, he wants to raise taxes on us to pay for his over spending.

The Irony of Tax Increases

There is no untaxed lunch

Forget free lunches, there is no untaxed lunch.

But many of those cashing in on the clunkers program are surprised when they get to the treasurer's office windows. That's because the government's rebate of up to $4500 dollars for every clunker is taxable.

Tobacco Taxes miss estimates

The National Center for Policy Analysis took a look at the new federal excise tax on cigarettes for the S-CHIP program. (You'll remember this as being one of the early broken promises by the Obama Administration. During the campaign, Barack Obama and Joe Biden repeated time and again that if you make less than $250,000 a year, your taxes would not increase. They lied.)

The conclusion:

Using tobacco tax increases to fund health care for low-income children is a bad idea. As the taxes imposed on tobacco products increase, revenues are likely to fall - requiring increases in other taxes. In addition, small businesses and their employees are likely to suffer, and the impact on public health is likely to be negligible, or even negative.

Mississippi was smart not to tie the tobacco tax to health care. But the cigarette tax was sold to off-set another tax, the new car sales tax, which is used to off-set the car tag tax that is too high for people. Legislators incrased taxes to off-set low tax revenues directed at hiding the pain of another tax that is too high.

That was the fight earlier this year. Now it is clear what will happen next. Last May, in its opposition to the cigarette tax increase, Citizens Against Government Waste predicted: "When the expected tobacco tax revenue fails to materialize, the politicians in Jackson will end up increasing yet more of your taxes to make up the shortfall!"

Sure enough, the Mississippi Tax Commission's July 2009 revenue numbers released earlier this month show the tobacco tax income failed to hit projections by 17.99%. Overall, tax revenue came in at almost 10% under projections. That means two things: massive cuts and legislators itching to raise taxes. Their answer will be that they didn't get the revenue they expected last year, so they have to raise more. Here are some of the biggest misses of projections versus reality in July 2009.

Sales Tax: -10.81%
Individual Income Tax: -17.66%
Tobacco Tax: -17.99%
Oil Severance Tax: -33.51%
Natural Gas Serverance Tax: -63.42%
Installment Loan Tax: -35.98%
Title Fees: -30.77%

Mississippi can not tax itself into prosperity. The answer is not higher taxes. The answer is cutting government. So as legislators begin looking at the next budget, remind them: don't raise taxes, cut spending.

TEA at NGA

When governors from across the country meet in Biloxi this weekend for the National Governors Association summer meeting, they will have a front row seat view of a Mississippi TEA Party, just across the street from where many are staying.

Mississippi Independence Day Tea Parties

The Mississippi Tea Parties are back for Independence Day. Here are a few that are on schedule so far.

Bay Saint Louis – Saturday, July 4, 12 p.m. to 3 p.m., front steps of Bay Saint Louis City Hall, 688 Hwy 90

Byram - Saturday, July 4, 9:30am - 10:30am: Swinging Bridge Fish House in Byram

Hattiesburg - Independence Celebration - Details to be announced

Hernando – Saturday, July 4, 10 a.m., County Courthouse

Iuka - Saturday, July 4, noon, location to be announced

Jackson - Please come join us from 11am - 2pm on Saturday, June 27th in the cool shade of Boyle Park on Lakeland Dr. Parking will be at Smith Will Stadium, on the east side of the parking lot - 1200 Lakeland Dr. There are two foot bridges that you can use to access the park.

Laurel - Tea Party II, "Spirit of 1776" - Tuesday, June 30 - Jones County Courthouse in Laurel - 6pm

Meridian - Saturday, July 4, DuMont Plaza in downtown Meridian: 10am-Noon.

Tupelo - Tupelo City Hall, July 4, 10am-11am

Mississippi Democrat Advocates Obesity Tax

Brian Perry writes in the Madison County Journal that the feds and other states are moving beyond cigarette taxes and looking to increase taxes on beer, soft drinks, and even candy. Coca Cola and Pepsi are the new Marlboro and Camel. And "Big Sweet" is the cause of obesity and sugar should be taxed to off-set healthcare costs.

Right on cue, here is the leading Democratic candidate in the special House election in Meridian.

Wilbert Jones said he is in favor of taxing things like cigarettes that cause health problems. "Obesity, smoking, alcohol, the sins of our society. It is time that we tax those sins of our society."

Breaking the No-Tax Promise

The Americans for Tax Reform pledge is very simple.

Mississippi Taxpayer Protection Pledge

I, ___________, pledge to the taxpayers of the ________ District of the
State of Mississippi and to all the people of this state, that I will oppose and
vote against any and all efforts to increase taxes.

No one has to sign it, but it is an effective tool in demonstrating conservative bonafides in an election year and showing you are different from tax and spenders.

These Mississippi elected officials kept their pledge when they voted against the Mississippi cigarette tax increase:

Representative Larry Baker, Representative William Denny Jr., Representative Mark Formby, Representative Stephen Horne, Representative William W. Janus, Representative John Moore, Representative Billy Pigott, and Senator Lee Yancy

These Mississippi elected official broke their promise and voted for higher taxes:

Representative Richard Bennett, Representative Gary A. Chism, Representative Bobby B.. Howell, Representative Bennett Malone, Representative Rita Martinson, Representative Bobby Moak, Representative Alex Monsour, Representative Ray Rogers, Representative Johnny Stringer, Representative Jessica Upshaw, Representative Joseph L. Warren, Senator Sidney Albritton, Senator Billy Hudson, Senator Tom King, Senator Dean Kirby, and Senator Alan Nunnelee.

Governor Haley Barbour and Lieutenant Governor Phil Bryant also signed the pledge.

Y'all Politics and Majority in Mississippi also have this story.

Citizens Against Government Waste opposes cigarette taxes

OK, ok, it seems every established conservative group in the country is jumping on this anti-tax wagon. Here is the missive from Citizens Against Government Waste, another taxpayer advocacy group.

Mississippi Residents: Help Stop a Tax Increase in Your State!

The Mississippi State Legislature is considering a proposal to raise the state cigarette excise tax by 177 percent to 68 cents per pack.

While cigarette tax increases have proven politically popular across the country, time and again history has shown that raising excise taxes does not produce projected revenue. Of the 57 excise tax hikes that states implemented between 2003 and 2007, only 16 met or exceeded revenue targets. As just one example, when New Jersey raised its cigarette tax in 2006, instead of gaining a projected $30 million in revenue, the state lost more than $22 million.

Mississippi’s proposed tax increase would make your cigarette tax rate higher than those of all four bordering states, driving smokers to purchase their cigarettes across state lines, or through untaxed or lower-tax venues, such as Native American territories and the Internet.

When the expected tobacco tax revenue fails to materialize, the politicians in Jackson will end up increasing yet more of your taxes to make up the shortfall!

In addition, excise taxes are regressive, disproportionately impacting the poor and those living on fixed incomes, and the Congressional Budget Office has said that cigarette excise taxes are the most regressive of all. With millions of Mississippians struggling to make ends meet during the economic recession, no taxpayer -- particularly not those most disadvantaged -- should be forced to hand over more of his or her hard-earned money to the government.

Please tell Governor Barbour, who pledged not to increase taxes, and your state senator and representative to forego raising taxes and instead do what households across the country are doing: Cut wasteful and non-essential spending to fund vital priorities!

More conservatives oppose Mississippi cigarette tax hike

The National Taxpayers Union and its Mississippi affiliate Mississippi Forward have joined other conservative groups like American for Tax Reform in opposing the Mississippi cigarette tax hike.

In a letter to Governor Haley Barbour they write:

On behalf of the taxpayers and small business owners of Mississippi, we urge you to veto the proposed 50-cent-per-pack increase in the state cigarette tax. This proposal is the exact opposite of what Mississippi needs in the midst of a painful recession. The cigarette tax is among the most regressive of all levies, and increasing it in this economic climate would hammer the state’s poor. It would also leave Mississippi with a higher per-pack rate than all but one of its neighbors. Your veto of this extortionate proposal would send a clear pro-taxpayer message to the Legislature.

A tax hike on cigarettes is bad economic policy in general, but this 50-cent increase will have especially negative consequences for Mississippi. Currently, the state enjoys a significant tax advantage over its neighbors, whose cigarette tax burdens are at least twice as heavy as that of the Magnolia State. This legislation will give Mississippi a higher rate than every border state other than Arkansas, crippling retailers as consumers cross state lines for lower prices. That spells trouble for an already sluggish economy.

Small business owners won’t be the only ones adversely impacted by this recessionary tax increase. It will be felt disproportionately by Mississippi’s poor families, as those earning less than the state’s median income are more likely to smoke. Taxes also consume a higher percentage of their income. With a federal cigarette tax increase having recently taken effect, the legislation headed to your desk constitutes a double-whammy for Mississippi’s low-income families. Furthermore, as the combined federal-state cigarette levy climbs and consumption decreases, Mississippi will be fighting with Washington over a dwindling pot of revenues. That’s why policymakers should focus on government spending restraint to keep the state’s fiscal condition healthy over the long term.

This tax hike will have negative implications that ripple through the entire economy. Now is not the time to raise any taxes, especially the excise on cigarettes. Mississippi needs to put itself in a position to attract business, not repel it. For these and the other reasons we have outlined, taxpayers are counting on you to protect them from the Legislature’s latest tax scheme.

Non-Smokers Get Burned by Tobacco Taxes

Looking back to 2008 we find this report on how cigarette taxes affect non-smokers.

"Significant segments of the non-smoking population go along with efforts to raise tobacco excise taxes because these taxpayers believe they can avoid the resulting pinch by simply not buying cigarettes -- a classic case of the 'tax thee, but not me' mentality," said NTU Director of Government Affairs Kristina Rasmussen, who authored the study. "As the data shows, however, the end result is often 'tax we' -- tobacco tax hikes have very real fiscal implications for non-smoking taxpayers."

Rasmussen's paper outlines five reasons that non-smokers should oppose high tobacco taxes:

1 - States with low cigarette taxes tend to have lower overall tax burdens. The per capita state and local tax burden in high-tobacco tax states is 8 percent above the national average, while the general tax bill for residents of low-tobacco tax states is 15 percent below the national average.

2 - Tobacco tax hikes rarely result in other cuts and are often paired with other tax increases or cuts worth less than the tobacco tax boost. "Most states that increase cigarette taxes don't refund the revenue elsewhere -- they spend it," the study notes.

3 - Tobacco tax increases don't prevent other hikes. Taxpayers face a seven out of 10 chance of seeing another net annual tax hike within two years of a tobacco tax hike.

4 - Cigarette tax hikes may encourage other increases because the extra revenue often is tied to specific spending schemes (such as health care or education) and tobacco use rates are falling -- along with potential tax collections. State governments will need to look elsewhere to fill the gap, and non- smokers could be on the hook.

5 - Tobacco taxes don't spur economic growth. States that adopted a tobacco tax hike in fiscal year 2003 saw an average growth rate in gross domestic product from 2005 to 2006 that was 0.6 percent lower than states that did not adopt a tax increase.

"Whether or not an individual uses tobacco, tax hikes hurt everyone by encouraging the growth of government," Rasmussen concluded. "While tobacco tax increases will assuredly come up as funding 'solutions' in the future, taxpayers -- smokers and non-smokers alike -- would be better served by extinguishing such a notion and instead focusing on cutting the size of government."

National Conservative Group Opposes Mississippi Tobacco Tax Hike

The way for Republicans to seperate themselves from Democrats is not to jump on the greater taxes during a recession bandwagon. What happened to cutting government spending? Now some Republicans want to do the easy thing, raise taxes because people don't like smokers. None of us at Respond Mississippi smoke. But we also don't like tax increases.

So we salute our conservative brothers at Americans for Tax Reform(Hat Tip Y'all Politics).

Mississippi legislators will return to the capitol on May 6 to vote on a proposal to raise the state cigarette tax by 50 cents. This is effectively a 616% tax increase.

What's worse, this comes on the heels of a 156% federal ciggarette tax hike that went into effect on April 1st.

It is no secret that tobacco products are a dubious and declining source of revenue. Evidence from nearly every state that has unfairly targeted smokers for government revenue shows that very few tobacco tax hikes actually meet their revenue goals.

When New Jersey raised the cigarette tax 17.5 cents in 2007 they expected to bring in an additional $30 million. Not only did New Jersey not meet that target, the Garden State ended up with a net loss of $22 million in total tax revenue from tobacco. Maryland doubled the cigarette tax to $2 last year and cigarette sales dropped 25%, falling considerably short of projections.

To make matters worse, a cigarette tax hike’s effect would be felt predominantly by those least able to afford it. On average, smokers, whose median income is a little more than $36,000, make about 30 percent less than non-smokers. Furthermore, President Obama has already burdened smokers this year with the previously mentioned 156 percent hike in the federal excise tax on cigarettes. Piling more taxes on top of this is ill advised and adds insult to injury.

State spending priorities should be funded through existing resources and with as broad of a base as possible. Raising taxes on a declining revenue sources like tobacco to fund state spending programs is a recipe for higher taxes in years to come. As tax revenues decrease and spending commitments mount, legislators will be forced to raise other taxes in the coming years for additional revenue. Furthermore, when combined with the higher federal cigarette tax, the revenue from an increased state cigarette tax will decline even faster than projected.

ATR will continue to reach out to Mississippi lawmakers to urge their opposition to this odious proposal. Stay tuned for more updates on this important matter.

Lets hope conservatives do not join President Barack Obama in looking for political popularity with tax increases.

Barbour's Tax Study Commission on Tobacco

With all the back and forth on tobacco taxes, lets take a look at what Governor Haley Barbour's "Mississippi Tax Study Commission Report" said about tobacco taxes.

6.7 Tobacco Taxes

6.7.1 Increase the Taxes on Cigarettes - The excise tax on cigarettes is lower in Mississippi than most other states in the nation. (see Table 7 on next page, Source: Federal Tax Administrators) A number of proposed changes were submitted to increase this tax. The Commission recommends an increase in the excise tax from 18 cents to 50 cents per pack, which would reflect the average of the four adjoining states.

6.7.2 Create a New Tax to Provide Equal Taxation for All Cigarette Manufacturers - Create a new tax on all tobacco manufacturers and give credit against this tax for payments made under the settlement agreement in the State’s tobacco lawsuit. The burden of this new tax applies to manufacturers not participating in the Mississippi settlement agreement.

6.7.3 Maintain All Increases in Tobacco Taxes for General Fund Use - Any revenue increase should not be tied to a specific use or other recommendation, but should be general fund revenue.

6.7.4 Tax Smokeless Tobacco Based on Weight - Implement a unit excise tax based on weight.

And what did the man who holds the veto pen say recently?

“The preliminary figures I shared with the legislative leadership today are based on a least-change model that would make the fewest and smallest cuts for departments and agencies allowed under the stimulus rules as we understand them. I cautioned the leadership that these calculations are still subject to approval by the federal government in certain areas; in addition, these figures assume restoration of the $90 million hospital tax and a tax increase of 42 cents per pack on cigarettes, making a total state tax of 60 cents per pack. I hope the Legislature will also enact tax increases on smokeless tobacco products and non-participating cigarette companies.”

Ed Blackmon...Pay your Taxes!

No wonder Democrats don't care about taxes. Why should they when they don't pay them? Take, for example, the law firm of Ed Blackmon, Chairman of the House Judiciary Committee. The following information is courtesy of Madison County on April 16.