Get Ready Cause Here I Come to a State Near You ~ Taxes, more Taxes and Obamacare

Only two weeks left in the Arkansas 88th General Assembly Session and what a two weeks it will be. Here is the calendar for just next week~ (http://ow.ly/4iqgE )

Tomorrow the Special Language Committee is meeting and according to statements made by Senator Kim Hendren and Rep. Tim Summers and Russ Carnine at a breakfast I attended Saturday morning, this committee needs to be abolished. Evidently there are some shenanigans that go on in that room that would make even Rod Blagojevich blush. 

The Special Language committee is evidently going to be voting on an unpublished amendment by Rep K Ingram, published here now, tomorrow that would take some $3million from the Land Commissioners budget and use it for special ear marks that are lined out on page 6 , thoughts? you decide~

Also Tomorrow in the Senate Transportation Committee the Diesel Tax, HB1902 is on the agenda. Keep in mind, as posted before, this bill increases Arkansas’ diesel tax to 7.7 cents HIGHER than all of our surrounding states (Missouri, Oklahoma, Texas, Tennessee, Louisiana, and Mississippi). Diesel taxes are almost entirely passed on to consumers in higher cost of retail goods including food, clothing, office supplies, etc. (according to a Stanford University study conducted in March of 2010.1) For every one cent diesel tax increase per gallon, Arkansas consumers face an increase retail price of 1.09 cents. Because Arkansas has the third highest per capita recipients of social security payments in the United States, just over 20% of our population2, the burden will be felt most significantly by those living on fixed incomes

Another tax to be on the look out for Tuesday is the Hwy Tax HJR1001,  due before the House State Agencies Committee.

If that ain't enough to get your dander up then start looking for the "Head and Shoulders" cause the bill to implement Obamacare in Arkansas I am told is set to run on Wednesday in the House Insurance and Commerce Committee. HB2138 by Rep Hyde which according to an email was amended late on Friday, copy of Amendment here.

Not sure where the Senate twin (SB880) is to this but it hasn't been amended yet. Arkansans beware that they could ram Obamacare thru here in Arkansas in as little as 3 days…”

WINNER WINNER~ BUDGET THINNER... AND ONLINE

Today was an EPIC day in the Arkansas Legislature!


By a vote of 5-76-7 the House voted down 113 GIF (General Improvement Fund) request, totaling nearly a BILLION dollars. WAY TO GO!








They also reportedly voted down another 8 bills according to Tolbert Report. In his post today Jason explains what GIF's are and list the other 8 bills (read more...)


And that's not all...


A tweet from Rep. David Meeks this afternoon said "I've been assured that HB1992,the severance tax bill, will be pulled.It has been killed for now. Will let u know if that changes."
You will recall that HB1992 was the "shale tax" bill that I spoke of in my post "I Picked the Wrong Week..." and the committee meeting that was so horrible.


But wait there's more...


Just when you thought it couldn't get any better, HB2060, the bill that was a mandate for union dues to be taken from paychecks and paid directly to the union is being pulled and will be removed from the calendar~ 


AND.... Drum Roll Please

The Arkansas State Senate UNANIMOUSLY voted to approve SB221 the online checkbook bill!


IT IS A GREAT DAY IN THE STATE OF ARKANSAS~ 
PLEASE CALL YOUR REPRESENTATIVES AND SENATORS AND TELL THEM YOU APPRECIATE THEM STANDING WITH ARKANSANS!


AND>>> While you have them on the phone encourage them to vote the rest of this session to GROW JOBS~ NOT GOVERNMENT~ Yes on Capital Gains Tax Cut (HB1002), NO on Diesel Tax (HB1092) and Internet Tax(SB738)

Update on Internet-TAX

Thought Arkansans would be interested to know what impact the "Internet Tax" our legislators passed through the Senate last week is having in other states such as Illinois. 

Illinois Governor Pat Quinn (D) signed the tax into law on Thursday.  Amazon and other online retailers wasted no time pulling out.

Call your Representatives and let them know you do not want to follow Illinois~

Here are a few stories with the details~ Pay attention Arkansas! 

From Townhall Finance~ Amazon cuts Ill. ties over sales tax collection

 "Amazon.com has made good on its threat to cut ties with Illinois affiliates because of a new law requiring the online store to collect sales taxes.

Amazon notified its Illinois partners Friday that it will stop doing business with them April 15. It calls the tax law "unconstitutional and counterproductive.

Online retailer Overstock.com said later that it also will cut ties with Illinois-based partners beginning May 1.

Gov. Pat Quinn signed legislation Thursday that requires online companies to collect sales taxes on Internet purchases if they have any affiliates based in Illinois. Affiliates are businesses that refer customers to Amazon and Overstock and receive commissions on purchases.

The sales tax always applied to Internet sales. But individuals _ not online businesses _ were responsible for paying it. Few people did.

 From Investors.com Illinois' Illogical Internet Tax

Fiscal Policy: Illinois becomes the latest state to enact a law imposing a sales tax on Internet retailers. Advertised as saving "main street" jobs, it's yet another creative way to drive them off.
Ignoring the truism that when you tax something you get less of it, Illinois Gov. Pat Quinn on Thursday signed legislation making the Land of Lincoln the latest state to enact what's dubbed the Amazon Tax. It's designed to collect state sales taxes from online companies if in-state businesses do business through websites such as Seattle-based Amazon.com.

In the past, online companies such as Amazon avoided collecting and paying state sales taxes, arguing they have no physical presence in a given state. A 1992 Supreme Court decision found that businesses had to collect sales taxes only in states in which they had a substantial physical nexus there.

Amazon has no physical presence in Illinois, but its affiliates — companies that market through Amazon — do.

Illinois now joins Hawaii, North Carolina and Rhode Island in getting around this impediment by considering affiliates as the required nexus. Amazon's in court with New York over a similar law.
According to the Tax Foundation, such taxes do not produce huge revenue streams. "Rhode Island," it says, "has seen no additional sales tax revenue from its Amazon tax, and because Amazon reacted by discontinuing its affiliate program, Rhode Islanders are earning less income and paying less income tax."

Illinois has about 9,000 such affiliates, and Rebecca Madigan, director of the Performance Marketing Association, an affiliate trade group, estimates the state will lose 25% to 30% of tax revenues collected from the affiliates themselves as they lose business, cut jobs or move out of Illinois.

"We had opposed this new law because it is unconstitutional and counterproductive," Amazon said in a letter announcing it was severing ties with its Illinois affiliates. Businesses targeted by the new tax are already packing their bags to move to friendlier tax climes.

Until Quinn's action in signing what is called the Main Street Fairness Act, those Amazon or Overstock.com affiliates didn't have to collect the state sales tax as a local store selling the same product must.

Quinn says this law "will put Illinois-based businesses on a level-playing field," putting online retailers under the same tax burden as brick-and-mortar stores.

Likelier, it will simply force businesses to flee the state and leave their brick-and-mortar offices and buildings empty.

Letting Capital Prompt Gains~ Capital Gains Tax Cut~

Let’s kick this off with explaining what a capital gain even is in the world of taxation. It was brought to my attention the other day that many people don't have a clue what the term means. It does have one of those foggy, generalized sounds that conjures not a single image.
   

A capital gain is simply what the tax law calls the profit you receive when you sell a capital asset, which is property such as stocks, bonds, mutual fund shares and a business that constitutes real estate. This doesn’t include your primary residence by the way.

There already is a federal capital gains tax, which means that even without an additional state version, you will pay at least 10% (and as much as 36%) on a short-term capital gain (less than a year) regardless of your home state. 

But if you’re a business owner or someone who owns real estate, or has invested his money and lives in the state of Arkansas , you’ll also be forking over another average of 4.9 percent on the sale. 
    

I should point out again at this point that Arkansas is one of the nation's least business friendly states, coming it at 39th. We are the 14th highest in state and local tax burden at 9.8%   and Arkansans make $13,000 less than the national average median income. 

Our neighbor states (see map above) are kicking our Razorback hindquarters , and Texas, our arch sports rival is growing in business because they have figured out how to attract, rather than repel new businesses that spell additional new jobs. Those Longhorn folks, along with other neighboring Southern states, realize that eliminating their capital gains taxes is just good for business growth.

According to the Tax Foundation's Background Paper: 2011 State Business Tax Climate Index 

A far more effective approach is to systematically improve the business tax climate for the long term so as to improve the state's competitiveness. When assessing which changes to make, lawmakers need to remember these two rules:

• Taxes matter to business. Business taxes affect business decisions, job creation and retention, plant location, competitiveness, the transparency of the tax system, and the long-term health of a state's economy. Most importantly, taxes diminish profits. If taxes take a larger portion of profits, that cost is passed along to either consumers (through higher prices), workers (through lower wages or fewer jobs), or shareholders (through lower dividends or share value). Thus a state with lower tax costs will be more attractive to business investment, and more likely to experience economic growth. 

• States do not enact tax changes (increases or cuts) in a vacuum. Every tax law will in some way change a state's competitive position relative to its immediate neighbors, its geographic region, and even globally. Ultimately it will affect the state's national standing as a place to live and to do business. Entrepreneurial states can take advantage of the tax increases of their neighbors to lure businesses out of high-tax states.

Columnist Mike Masterson, (full disclosure) my husband, described in his column yesterday this very scenario: 

[A] reader told me that in 1991 an Arkansas banker he knew prepared to sell his bank holding company to another in-state, start-up bank holding business. Before the transaction occurred, the seller moved to a neighboring state that had no a capital gains tax on a business sale. This meant that he legally avoided paying capital gains and income taxes.
Six years later, the same holding company was bought out by another in-state bank that was, in turn, was bought by another, all in fairly short order.
“Those were stock exchange and tax-free gains until a shareholder sold his shares in the open market,” the reader wrote. “As a director and shareholder of the original purchasing bank, I bought as much stock in the bank as I could.”
When the time came for him to sell and pay capital gains, he’d already left Arkansas and saved a hefty chunk by avoiding capital gains taxes on the sale. He still holds a fair amount of stock in another bank after selling half of it while living in his new home state. Once again, he paid nocapital gains taxes because he didn’t have to.
Another of his friends in Arkansas owned a professional firm that he wound up selling. He also bought a home and moved to another state without any capital gains tax before the sale was complete. Cha-ching!
“Arkansas has lost quite a bit in sales and ordinary income taxes from just from us,” the reader. “Arkansas definitely needs to have this bill passed.”
Any questions so far? I hope the need for HB 1002 is becoming much clearer for our oddly resistant governor and any legislators who, inexplicably, oppose the measure, which could help attract businesses and jobs to our state.
Successful politicians find it best to vote for improving Arkansas and its people rather than engaging in or knuckling under to self-serving oleboy politics.
“I’m confident that the other Arkansas businessman and I made our moves to preserve those moneys forour heirs and our select charities,” said this reader, who’s approaching his 70th birthday. “No one did it for personal lavishness. We didn’t want or need to do that. There are a great many like us whose other taxes and contributions Arkansas has missed out on because of its current tax structure.
“I want to be sure to leave my family enough to live on and enough to cover almost any adverse health events,” he continued. “My state now has no income, capital gains tax, estate or death taxes. Were Arkansas close to that, I’d live in the River Valley until I die. As is, I live here.” Ole-boy politics.

 This is an important bill for Arkansas families and attracting Arkansas businesses. Get the facts and contact the Senate Revenue and Tax committee members,  ask them to grow jobs NOT government~  

Senators Lamoureux, Files, Sample and Williams have already committed to a YES vote.

Please contact Senators Teague, Taylor, Chesterfield and Bookout 

 

Tax Cut Bills Causin a Rucus

For those of you that like a good ball game or inclined to like dramas you will not want to miss what is going on in the Arkansas Legislature right now.  The Arkansas House has passed 4 tax cutting bills (sponsored by House Republicans), the Senate has passed 3 (sponsored by Senate Republicans),  all 7 bills are sitting in the opposing house and tensions are building.


Today in the Senate Tax & Revenue Committee HB1369 (Back to School Tax Holiday Bill) failed. Rep Justin Harris tweeted that the Democrats on that committee were at the root of the failure. 

Rep Justin Harris~AR Dems on Rev and Tax voted down the Back to School Tax Holiday! Wow, the people will speak loudly in 2012! Not helping working families through tax cuts is a huge mistake!

On the 18th of February I posted   ~Tax Nazi Loses to Minority Majority~ pointing out that the Governor has made is quite clear the only tax cut he endorses this session is his Grocery Tax cut. His wishes may soon come to fruition, the political tensions are mounting. 




To spice things up a little Talk Business reported today that Rep Davy Carter will be adding to the mix: 

"It has long been a goal of House Revenue and Tax Committee chairman Rep. Davy Carter (R-Cabot) to systematically over a multi-year period restructure the rates on personal income taxes. Carter and Sen. Jonathan Dismang (R-Searcy) are filing a bill on Wednesday to shift those brackets" (read more...)

The next few weeks of the 88th General Assembly will prove to be very exciting, it would be the perfect time for the citizens of our fair state to contact and communicate with their elected officials. Let them know we are not interested in political shenanigans but in what is best for the families and business of Arkansas and that we expect them to take into account our input and to do their due diligence in determining what that is and vote accordingly 

 

CAPITAL GAINS and the $44.5 Myth~ Where's the Press~

Why haven't we read this in the press about the Capital Gains Tax Cut? 

 Most of the stories that I have seen in the media over the HB1002 filed by Rep. Ed Garner are talking about this huge loss of revenue of 44.5 million dollars. But have you read this?~

Sent to me by Rep. Garner~

The 44.5 Million Dollar Myth

DFA has projected a 44.5 million dollar impact on revenue of the 2013 fiscal year when HB1002 passes.  There is no, can be no, impact on the 2012 budget. Zero.  Let's examine the fantasy of this assumption.  It is important to understand this equation because many State funded agencies, most notably, Higher Education has been told that their budgets will be cut to make up for the imaginary loss of revenue.  It is unfortunate that political rhetoric has obscured the facts of this important legislation for job creation in Arkansas.

This is what would have to happen…..

In order to affect the 2013 Budget, capital investments would have to be made in Arkansas after July 1, 2011 through Dec. 30, 2011.  A six month window.  Those investments would have to be held for over one year and sold in the six month window of July 3, 2012 through Dec. 31, 2012.

The equation for this impact is as follows…

Capital Gains from NEW Arkansas investments made July 2, 2011 through Dec 30, 2011, held for over 1 year     minus     30% of the gain and sold at a profit July 3, 2011 through Dec 31, 2011                               (current exclusion)

equals   Capital Gains taxed at AR income tax rates for the taxpayer

                  (this is running at an effective rate of 6%)

So…… to have an impact of 44.5 million dollars this must be the equation….

1.064 Billion Gains - 319 million (30% exclusion) = 744.67 million x 6% (effective) = 44.5 million

Assuming an average 10% return, 10.64 Billion would have to be invested and sold in Arkansas investments with 6 month windows for the buy and sell.

If even as much as HALF of all Arkansas investment made could be sold at an average 10% profit after one year…. Total investments in Arkansas in the second half of 2011 would equal 21.28 Billion in new investments in Arkansas.

This is simply not possible. This is a myth.  Will the media report this?  What is the response of Higher Ed who has been told their budgets will be cut?

Morning Roll Call~ News You Need to Know

No time for pontification this morning here is the scoop~


Get Schedule here~http://www.arkansashouse.org/events


Listen live to committee meetings and House floor here~ www.arkansashouse.org


Sen. Jason Rapert's Taxpayer Protection Amendment SJR4 will be heard 2day at 10 a.m. in the OSC at the Capitol. 


Twitter Links~


ademillo7:37am via AP Mobile_client

On the agenda for #ARLeg today: Ark. Senate to take up 3 tax cut bills. http://apne.ws/fDW4kV

RobyBrock8:26am via Web

Follow-up on yesterday's late announcement on Chesapeake sale of Fayetteville Shale assets.http://bit.ly/dM7J5p

FamilyCouncil8:17am via web

Sen. Larry Teague files bill that would allow for more legislative oversight of the lottery:http://tinyurl.com/4tu6cro #ARLeg

RLACC_GovFeb 21, 10:51pm via Constant Contact

RLACC Gov Affairs Comm Update ...http://conta.cc/dHSSdV via #constantcontact#arleg #479

ArkansasBuzz

8:08am via twitterfeed

Jim Purcell Interviews Wednesday for Louisiana Higher Ed Post http://bit.ly/gBV0oT

ArkansasBuzz7:49am via twitterfeed

Homeowners in Foreclosure Average 17 Months Late http://bit.ly/fbeDrB

RobyBrockFeb 21, 5:43pm via web

#ARLeg First GOP candidate files for open House Dist. 54 seat. http://bit.ly/dFBUYF

Roll Call~

I will be at the Capitol for the next few days. Here is the schedule for the week. If you want to get a real feel for what is happening during the session I would encourage you to sign up on Twitter. It is very simple and is completely free. When you set it up follow me @llmasterson and be sure and visit the hashtag #ARLeg. You will see messages from tons of people attending committee meetings, talking with legislators and discussing bills~
If you would like to find out how to use Twitter, you can visit American Majority's page "Twitter for Beginners"













TAX TUG OF WAR


This week is expected to be one of the more exciting at the legislature, especially concerning taxes. 
You may recall in Governor Beebe's State of the State address where the Governor said" 

Beyond that [half-cent grocery tax cut], I don't see any room for additional tax cuts or significant increases in program funding. If we are to retain the enviable national position we now hold, we must remain cautious and conservative. If you make a proposal that seeks to cut revenue or increase spending, the only responsible approach is to state precisely where that money is coming from. If the proposal calls for a tax cut, then it is only fair to detail exactly which existing programs you will cut to offset that loss in funding. Abstract claims of hypothetical future growth don't change the immediate impact that a tax cut will have on state revenues and state services. 

But legislators seem not to be detoured by the strong warning of the Governor, over the next few weeks they will be proposing more than $217 million in tax cuts. Evidently many listened to the masses of people who sent a very clear message on Nov. 2nd demanding lower tax, less government and more fiscal responsibility.

Our tax loads in Arkansas are among the most burdensome in the nation. We are 39th in state business tax climate  the worst of 7 states in this region, Louisiana being the closest at 36th. Our state and local sales tax rates put us in the top 10 of highest taxed, ranking in at #9. 

Not exactly the top 10 list we were striving to make.

On Tuesday Rep. Ed Garner  (R- Maumelle) will present HB1002, a bill that will reduce the capital gains tax. Right now Arkansas's Capital Gains tax is 4.9% compare this to other states in this region~Texas and Tennessee have no income tax and therefore no capital gains taxes. Mississippi and Oklahoma have eliminated capital gains on in-state investments.


On Thursday Senator Gilbert Baker (R-Conway) hopes to present his bill SB274, which would raise the sales tax exemption on used cars from $2,500 to $5,000


Other tax cuts proposed include a $8.9 million sales tax exemption on manufacturer's or dealer's rebates for cars, a $3.8 million cut in the sales tax manufacturers pay on utilities and a $3.7 million tax cut for head of household taxpayers with two or more dependents.


Many of the committee meetings will there bills will be discussed are stream live at http://www.arkansashouse.org/. I will update my blog as much as possible, do consider getting on Twitter it is an essential tool of communication for those wanting to become more informed and engaged!






SPEAKING OF SOCIAL MEDIA~ 


Think Social Media is just for kids or people who play farmville?~ Think again~ "It's a Facebook Revolution," said Akhnoukh. "That's what changed the future of Egypt. Facebook. It's as simple as that."

Being someone who's job description requires the use of social media I have found the web site "Mashable" to be quite useful. A story caught my eye this morning, "How We Use Social Media During Emergencies" , expressing that same sentiment about the importance social media played in the crisis in Egypt. 


Journalist at the BBC have been told to use social media as a primary source of information. According to a story in the Guardian,  Peter Horrocks, director of BBC Global News instructed his staff in February of 2010 "to make better use of social media and become more collaborative in producing stories."
He was quoted in the story as saying:

"This isn't just a kind of fad from someone who's an enthusiast of technology. I'm afraid you're not doing your job if you can't do those things. It's not discretionary"

It's like anything else new a little intimidating at first but then just like that microwave, VCR and now the ever popular Netflix once you have it you will wonder how you ever got by without it!

I invite you to join people from across Arkansas, some of America’s foremost free-market voices and top experts on grassroots mobilization, in a massive show of force for our shared belief in lower taxes and more limited government.that will gather on February 24th at the Second Annual Defending the American Dream Summit. 

Register Today!

Morning Roll Call~ News You Need to Know

Majority Required to Raise Taxes

Thank you to Senator Jason Rapert (R-Bigelow) who has filed a constitutional amendment, SJR4 that would require a ¾ vote from both houses of the legislature in order to raise any tax.

As it stands, the amendment would require a ¾ vote from the Arkansas Senate and a ¾ vote from the Arkansas House in order to raise any tax, but would only require a simple majority vote in order to lower taxes or make changes to tax breaks and exemptions.

If passed this will be on the ballot for the 2012 election.

Legislators File "Good Government" Bill  

Arkansas hospitality and tourism officials are not happy about two proposed bills in the Arkansas Senate. These bills, SB180 and SB212 make it so cities and counties have to put A&P taxes to a vote of the people and revisit the tax every four years.

LOL... you can imagine the guys that run this show not being very happy about having to actually having to make a case to the folks footin the bill to raise taxes, what a novel idea.

To read more on this go here.

I invite you to join people from across Arkansas, some of America’s foremost free-market voices and top experts on grassroots mobilization, in a massive show of force for our shared belief in lower taxes and more limited government.that will gather on February 24th at the Second Annual Defending the American Dream Summit. 

Register Today!

     

           FEED

Region8News9:01am via TweetDeck

County population changes in Arkansashttp://bit.ly/giecYN

thecitywire8:48am via twitterfeed

Local Wire: Fort Smith market share for Bank of the Ozarks drops 52%: Reducing deposits requiring collateral and... http://bit.ly/ibdyh3

lobbyup8:12am via Web

New Lottery Bill headed to House Floor:http://lobbyup.com/hb1302

lobbyup8:07am via Web

Up Monday in Senate TTLA Committee: SB129 - To Provide for Internet Broadcast of Senate Committee Mtgs : http://lobbyup.com/sb129

5NEWS7:51am via Web

The Underground World Of Prostitution In Bentonville: http://bit.ly/gw9Obs

ArkansasOnline

7:12am via twitterfeed

Conditions on state highways improving: The Arkansas State Highway and Transportation Department reported Friday... http://bit.ly/dGFA7g

todaysthvFeb 10, 11:03pm via TweetDeck

Census numbers show Pine Bluff population falls, Jonesboro rises http://tinyurl.com/4c4q8cm M: http://tinyurl.com/4dd7wc7