America’s 2015 Tax Bill? It’s 31% of the Work Year

Tax Freedom Day arrives this year on April 24, six days later than it was two years ago. Tax Freedom Day is a calendar-based measure of Americans’ cumulative tax bill. It is calculated as the day on which Americans have worked long enough to pay all their taxes. Americans will have worked 114 days to earn enough money to pay this year’s combined federal, state, and local taxes. These taxes include personal income taxes, payroll taxes, corporate income taxes, and property and sales taxes.

However, this is only what Americans actually pay, not what government spends. According to the nonpartisan Tax Foundation, “Since 2002, federal expenses have surpassed federal revenues, with the budget deficit exceeding $1 trillion annually from 2009 to 2012 and over $800 billion in 2013….If we include…annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur on May 8….”

Americans currently pay more in taxes ($4.85 trillion) than they do on food, clothing, and housing combined. The saying goes, you should “work to live, not live to work.” But the more government grows, the more Americans are working less to live and more to pay for runaway government spending. That leaves fewer resources to invest in the real engines of economic growth: private sector businesses that create jobs and produce goods and services for a market fueled by Americans’ hard-earned purchasing power.

Portland Set to Approve Public Shaming of Building Owners

For members of the Portland City Council, the end always justifies the means.

Their current obsession is energy use in commercial buildings. On April 15 the Council likely will approve a regulation to require the owners of such buildings to: (1) monitor energy consumption; (2) calculate an “energy use intensity” score; and (3) file annual reports with the city.

Advocates claim that this will be good for building owners. It will give them information they would never get without prodding by bureaucrats, and provide market recognition for high-performing buildings.

In fact, this is just an effort to shame building owners and tenants into adjusting their behavior to conform to the political edicts of City Hall. Commercial buildings consuming “too much” energy will receive a Scarlet Letter and be harassed by bureaucrats and activists into expensive energy conservation retrofits, many of which will make no financial sense.

Energy consumption is a private matter. The Portland City Council should stand down on this proposal and leave people alone.

Oregon Children Deserve the Right to Try

Oregon hopefully will join twelve states that have enacted Right to Try legislation, allowing terminally ill patients to try experimental drugs not yet approved by the FDA.

In several states, the face of Right to Try efforts was a child. Fourteen-year-old Diego Morris was honorary chairman of the Arizona campaign that saw 78 percent of voters approve Right to Try last November. Diagnosed with a deadly form of bone cancer when he was eleven, Diego and his family had to move to London for treatment with a drug approved there, but not in the United States. Now cancer free, Diego visited the Oregon Capitol in February to meet with legislators. When asked what he would say to opponents of Right to Try, Diego answered, “Wait until they find themselves in my situation, and then ask them.”

Five-year-old Jordan McLinn handed the pen to Indiana Governor Mike Pence when he signed that state’s Right to Try law last week. Jordan has Duchenne Muscular Dystrophy, a terminal illness that without experimental treatment may kill him before he turns 20.

No doubt some Oregon children could benefit from the Right to Try. House Bill 2300 would give adults that right, but not children under age 15. Those who favor Right to Try might let their state legislators know that faced with a terminal illness, children should have the same Right to Try as adults do.

Human Achievement Hour 2015

This Saturday you’ll have the opportunity to vote with your light switches. Either turn your lights off from 8:30 pm to 9:30 pm local time to “show your commitment to climate change action now” or turn your lights on to celebrate “human progress and our advancements in various fields of industry, including technology, medical, energy, and more.”

Turning your lights off makes you part of Earth Hour, a project of the World Wide Fund for Nature (WWF). Turning them on makes you a part of Human Achievement Hour 2015, a project of the Competitive Enterprise Institute (CEI).

Since this isn’t a secret ballot, I’ll tell you that I’m voting for Human Achievement. As CEI notes, “Earth Hour does little to protect the environment” and “completely ignores how modern technology allows societies around the world to develop new and more sustainable practices that help humans be more eco-friendly and better conserve our natural resources.”

You don’t have to wait until Saturday to see what a large-scale expression of the “dark ages” versus human achievement looks like. Just check out any NASA nighttime photo of North and South Korea from space: “North Korea is almost completely dark compared to neighboring South Korea….The darkened land appears as if it were a patch of water joining the Yellow Sea to the Sea of Japan.”

North Koreans may simply be celebrating Earth Hour every hour of every day, but somehow I doubt it.

TriMet’s Great Disappearing Act

During the 2003 session of the Oregon State Legislature, TriMet sought an increase in the regional payroll tax rate. In public testimony, TriMet General Manager Fred Hansen said, “TriMet’s proposed payroll tax increase will be used exclusively to provide new or enhanced transit service.”

The legislature approved TriMet’s request, and the payroll tax rate went up every January for ten straight years. By the end of 2014, TriMet had received $34.4 million in new payroll tax revenues attributable to rate increases. Yet during that same decade, the miles of transit service offered to patrons actually dropped by 14%, while the hours of service declined by 5%.

Like a magic show, TriMet tried to distract the audience by pointing to grand celebrations for the opening of the WES commuter rail line and the Green MAX line, both of which opened in 2009. But overall service levels were reduced five times in six years, the opposite of what was promised in 2003.

TriMet’s proposed budget for 2015-16 was released last week. It calls for “expanding service through the opening of the Portland-Milwaukie light rail line.” Once again, all the attention will be on new trains, while total service levels will still be far below the levels we had in 2003.

State legislators should be asking TriMet where all the money went. But sadly, no one in Salem cares about results.

Is Your Five-Year-Old Ready for Full-Day Kindergarten?

The Oregon State Senate is considering a bill that would lower Oregon’s compulsory, full-time school age from seven to five. Senate Bill 321 was heard in the Education Committee on March 5.

Most children start at least a half-day Kindergarten as five-year-olds, but not every five-year-old is ready for full-time school. According to a recent report by the National Center for Education Statistics, about six percent of five-to-six-year-olds nationwide are not enrolled in school. These children may need a little more time to be ready for a formal classroom setting.

Children are unique, and maturing at different rates is normal. Temperament, emotional maturity, life experiences, and family situations also can affect a child’s classroom readiness. Parents are in a better position to determine a young child’s abilities than an arbitrary standard set by state law.

Some opponents of SB 321 point out that there would be no protections for children who are not ready for a traditional classroom at five years of age. Their parents currently have the option to let them grow up a little first. This bill removes parental discretion.

Forcing children to start school too early for them can have long-lasting consequences. They may view themselves as failures, think they don’t like school, or find themselves playing a demoralizing game of catch-up with their classroom peers.

Parents, rather than state legislators, should decide when their preschool-aged kids are ready for full-time school.

Are ObamaCare’s Insurance Subsidies Legal?

Today the U.S. Supreme Court hears oral arguments in a case challenging the implementation of the Affordable Care Act (ACA). Plaintiffs in King v. Burwell claim the Internal Revenue Service (IRS) does not have the authority to circumvent the actual text of the ACA. According to the law, federal insurance premium subsidies can be allotted only if plans are purchased “through an Exchange established by the State.” When 36 states chose not to create their own exchanges, the IRS essentially rewrote this portion of the law to give subsidies anyway.

Oregon did set up a state exchange―Cover Oregon. But Cover Oregon never worked as planned; and now Oregon is contracting with the federal exchange, HealthCare.gov. The federal government and Oregon state officials claim this will guarantee Oregonians continued access to federal subsidies, but the King decision may not allow such subsidies to continue.

The King v. Burwell case could have a major impact on the future of ObamaCare. If the Court strikes down the IRS rule, the government would withhold subsidies for those living in states that chose to protect their citizens from the law’s employer mandate, the individual mandate, and the high costs of operating their own state-based exchanges. The Court’s decision could provide an important opportunity for states to reform health care in a meaningful way that respects taxpayers, provides for the truly needy, and addresses health care costs.

A ruling is expected by June 30.

Proposed Tobacco Tax Increase Will Simply Encourage More Smuggling

State legislatures across the country have piled on the tobacco taxes over the past decade. Not surprisingly, this has created a growing problem of tobacco smuggling. As the tax rate rises, it encourages people to buy products from low-tax states and sell them illegally in high-tax states.

New York is the most obvious example of this problem. The Empire State has a tax rate of $4.35/pack, far higher than most other states. As a result, an estimated 57% of all cigarettes sold in New York are brought in by smugglers.

This creates multiple problems. Cigarette buyers are inconvenienced; state legislators lose the tax revenue they were hoping for; and smuggling increases the likelihood of violence, since there are no legal ways to settle disputes among competitors.

These lessons seem lost on Oregon legislators. The House Revenue committee will consider House Bill 2555 on February 25, which would raise the tobacco tax by $1.00/pack. Currently, only about 12.7% of Oregon cigarettes are smuggled. If the new tax passes, more sales will take place in the underground economy, and net revenue to the state could actually decline.

With smoking now banned in virtually all indoor environments, the non-smoking majority is completely protected from secondhand smoke. There is no reason for additional taxes just because smokers are in the minority.

The Man Who Could Bring Down ObamaCare

Would you like to meet the man the media says could bring down ObamaCare? You’ll have that opportunity on Thursday evening, February 26, when Michael Cannon of the Cato Institute speaks in Portland.

Cannon is an architect of the legal strategy that could force the Obama Administration to follow the letter of its own Affordable Care Act and stop subsidizing insurance unless it is purchased through a state-established exchange. Cover Oregon was established by the state, but its website was so flawed that it couldn’t sign up a single person.

If Oregonians lose their subsidies because Cover Oregon failed, they will quickly find out just how unaffordable the Affordable Care Act really is.

To make this even more interesting, on the day Governor Kitzhaber resigned, the U.S. House Oversight Committee sent him a letter telling him not to destroy any documents that might shed light on the Cover Oregon fiasco.

And the U.S. Supreme Court will hear oral arguments in the case orchestrated by Michael Cannon on March 4.

Don’t miss your chance to meet The Man Who Could Bring Down ObamaCare on Thursday evening, February 26, in Portland.

For details and to RSVP, call Cascade Policy Institute at 503-242-0900, or visit cascadepolicy.org.

When Is a Tax Not a Tax?

Governor Kitzhaber wants you to drive less, and he knows that the best way to discourage driving is to make it more expensive.

The simplest way to do this would be to raise the state gas tax, which is currently 30 cents per gallon. However, this would require approval by three-fifths of the state legislative assembly, rather than the simple majority necessary for non-tax measures. There might not be enough votes for a tax increase.

The other problem is that the Oregon Constitution directs all gas tax revenues to be used only for road maintenance and improvement. Since improving roads would actually benefit motorists and potentially encourage more driving, this would undercut the Governor’s objective.

Instead, he is backing a legislative proposal known as the “low-carbon fuel standard,” designed to reduce the carbon dioxide emissions from motor vehicles. Because this will be a very expensive requirement for gasoline refiners, it would cause the price of gasoline to rise by at least 19 cents per gallon, and possibly much more.

As a non-tax measure, this bill only needs a majority of votes in the legislature, and there will be no actual revenues created that might benefit motorists. They will simply pay more, and get nothing in return.

In the world of Oregon environmental policy, this is called a clever strategy. For motorists, it’s a scam. Legislators who go along with it should be ashamed of themselves.

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