by Rex Sinquefield Forbes.com Contributor
Last week, Illinois Governor Pat Quinn signed a bill that places on the November 4 ballot a non-binding tax referendum that has many of us scratching our heads. If Governor Quinn is truly interested in finding out how voters feel, then the fuzzy language of the referendum will not serve him well. What seems to be crystal clear is that, in light of the state’s economic crisis, the governor hopes to drive more of his supporters to the polls on Election Day.
And it looks like Governor Quinn has every reason to be worried. On the same day that Quinn signed the bill into law, a Rasmussen poll showed that the Republican challenger, Bruce Rauner, had a five-point lead, an additional two percentage points higher than in April.
by Forbes contributor, Rex Sinquefield
This week one of the key Democratic Party strongholds voted to reduce income taxes and expand the sales tax base. The District of Columbia Council, which in 2012 supported President Barack Obama over challenger Mitt Romney by a wide margin of 13 votes to 1 (in a city where 90.9 percent of voters selected Obama), passed a pro-growth tax reform package that, if signed into law will:
- expand the sales tax base,
- reduce income taxes for individuals and businesses,
- increase the Earned Income Tax Credit to 100%,
- recouple estate taxes to federal levels, and
- save taxpayers about $67 million per year.
Mayor Vincent Gray has until July 8th to approve or veto the bill. Considering the near-unanimous (12 to 1) Council vote, indications are good that this bill will become law in our nation’s capital.
Admittedly, it would be a far stretch to claim a sea change in the Democratic Party’s tax reform agenda, but 2014 has brought with it two indicators reflecting a meaningful shift toward pro-growth state tax policies. The first can be found in newsreports last week about the Maryland governor’s race. Historically, Maryland has been a stronghold of Democratic politics. The Maryland Democratic Party is one of the world’s oldest continuously operating political organizations. In fact, Baltimore was host to the first six Democratic National Conventions.
But, the tide is definitely turning in the Old Line State. Three years ago, there was a dramatic shift in majority power at the county level from blue to red, and now Democrats hold control in only eight of twenty-three county governments.
Of the half-dozen or so hotly contested 2014 gubernatorial races across the country, the one in the battleground state of Wisconsin clearly demonstrates the widening policy disparities that can be found in our nation. It is here in “America’s Dairyland” that Republican incumbent Governor Scott Walker is running neck and neck with Democratic challenger Mary Burke, setting the stage for this fall’s must-see political theater.
Wisconsin’s politics are as diverse as its geography. The current political battle is grounded in the basic question regarding government’s role and includes some of the most critical policy issues of our time: jobs, education, and the ability for states to compete nationally and globally. Governor Walker’s ideas about how to accomplish these goals have been made clear, especially in the last three years.
On May 6th Missouri’s state legislature voted overwhelmingly, by a vote of 109-46, to override the state’s Governor’s veto of tax cut measures provided by Senate Bill 509. After a two-year battle, the historic income tax cut marks the first income tax reduction that my home state has seen in nearly 100 years and, ultimately, will benefit the state’s small business owners and millions of individual taxpayers.
In fact, according to State Senator Eric Schmitt, 54,000 businesses could benefit in St. Louis City and County alone. Across the state, 400,000 small businesses and 2.5 million individual taxpayers will be eligible for the income tax cut.
Toyota’s decision this week to leave Torrance, California, for the pro-businessenvirons of Plano, Texas, sent shockwaves through the Southern California community where Toyota employs more than five percent of the workforce. According to MSN Money, the move brings to mind Nissan’s decision eight years ago to move 1,300 jobs to the no-income tax state of Tennessee. A former Nissan executive recalled how the move equated to the company’s employees “getting a 20-percent raise.”
According to the 2013 City of Torrance’s Comprehensive Annual Report, the city stands to lose more than $473 million in property taxes. Plus, just over a year ago, Moody’s downgraded Torrance’s credit rating, citing a weakened general fund and increasing public expenditures.
Last year, I detailed Kansas’ roadmap for growth through comprehensive tax reform. Since then, the Center for Budget and Policy Priorities (CBPP), a left-leaning think tank funded by George Soros, lambasted Kansas’ significant pro-growth tax policy changes. These widely reported yet patently false claims fueled the opposition’s efforts to discredit the correlation between lower tax rates and economic growth. Below are five false claims that were published by the CBPP, followed by the facts that the organization chose to ignore or distort.
False Claim #1: Deep income tax cuts caused large revenue losses.
Facts: According to Kansas Interim Budget Director Jon Hummel, Kansas ended fiscal year 2013 with an 11.6 percent ending balance (3 percent more than what is required by state statute) and there is currently $700 million in the state’s reserve fund.
Of the nine states that are listed as no-income-tax states, only the state of Tennessee carries with it an asterisk, a footnote that weighs on its ranking, along with the livelihoods of many of the Volunteer State’s retirees, workers and entrepreneurs.
But there is a fire in the belly of some local legislators, possibly akin to a shot of the soon-to-be-released Jack Daniel’s Tennessee Fire on a chilly spring evening. They are working to eliminate the only income tax that the state imposes, and they are willing to stand up to fellow Republican legislators and GOP Governor Bill Haslam to get it done.
by Rex Sinquefield Forbes.com Contributor
Anyone who doubts that state leaders are looking for ways to compete with their neighbors need not look any further than the state of Idaho.
Long a beacon for outdoorsmen, the state’s natural offerings are second to none. From the majestic beauty of Twin Falls, to kayaking and trout fishing on the Snake River, to world-class skiing in Sun Valley, Idaho attracts hundreds of thousands of tourists annually. Just as impressive, the state now boasts 14 business incubators, rates number-one in the country for business patents, and was awarded an A+ rating for Small Business Friendliness (as well as named the seventh most inventive state) by the Kauffman Foundation. In 2013, the ALEC-Laffer State Economic Competitive Index reported that competition is alive and well in the Potato State. Between 2008 and 2013, Idaho’s ALEC-Laffer ranking went from tenth to seventh.