On behalf of over 300,000 of our supporters and activists across the nation, CFIF has written the following…
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CFIF to U.S. Senate: On Drug Prices, Say "NO" to Mandatory Inflation Rebate Proposals

On behalf of over 300,000 of our supporters and activists across the nation, CFIF has written the following letter opposing any use of Mandatory Inflation Rebate Proposals when it comes to the issue of addressing drug prices:

We believe that market-oriented solutions offer the optimal solution, and resolutely oppose any use of mandatory inflation rebate proposals – which would unfairly penalize a drug’s manufacturer with higher taxes whenever that drug’s price rises faster than inflation - that will make matters worse, not better. Among other defects, such a government-imposed penalty would undermine Medicare Part D’s current structure, which uses market-based competition to mitigate drug costs. Part D currently works via privately-negotiated rebates, meaning that no specific price…[more]

July 15, 2019 • 02:48 pm

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High-Tax Governors Scapegoat Tax Reform for the “Diabolical” Consequences of Their Own Policy Choices Print
By Timothy H. Lee
Thursday, February 28 2019
Instead of taking a long, hard look at whether their policies are suffocating their state finances, however, people like Cuomo blamed the 2017 tax law.

Should low-tax states like Tennessee, Texas or Florida subsidize high-tax states like New York, California or Illinois? 

Indeed, do low-tax states even owe a moral duty to support their high-tax brethren states? 

New York Governor Andrew Cuomo somehow thinks so.   He considers it “diabolical” and an “injustice” that states like his can no longer maintain high tax rates at the expense of low-tax states. 

But the Founding Fathers, who created a federalist system that allows states to serve as laboratories of democracy, would surely disagree. 

Moreover, people like Cuomo expose the sheer hypocrisy of the political left on the issue of taxes.  They claim to oppose tax cuts, whether they occurred under Ronald Reagan or Donald Trump, and some like Bernie Sanders and Alexandria Ocasio-Cortez even openly advocate a return to pre-Reagan income tax rates of 70% or more. 

But as Cuomo illustrates, their practice doesn’t match their preaching.  When forced to face the consequences of their policy preferences, they cry “uncle” and plead “injustice.” 

The wellspring of this sudden leftist political rage is the 2017 federal tax cuts passed by Congress and signed by President Trump. 

Prior to tax reform, the United States maintained the industrialized world’s highest corporate tax rate, which made us less competitive in an increasingly globalized economy.   Immediately following passage, our economy achieved liftoff velocity and emerged from eight long years of malaise under Barack Obama, vindicating President Trump’s economic agenda. 

The new tax code also rightfully slashed what’s known as the State and Local Income Tax (SALT) deduction, capping it at $10,000.  Simply stated, the SALT deduction had previously allowed residents of high-tax states like New York to deduct all state and local taxes from their federal taxes. 

In other words, residents of low-tax states couldn’t deduct in the way that high-tax residents could, thereby enabling leftist tax-and-spend, big government policies of those states. 

One year later, high-tax state political leaders like Cuomo are already facing the harsh reality and consequences of their destructive policies. 

Specifically, the exodus of residents from high-tax to more welcoming low-tax states is already taking a severe financial toll on the former.  According to United Van Lines, high-tax New York, New Jersey, Connecticut and Illinois suffered the greatest net exodus in 2018, joined by California.  In contrast, low-tax states like Tennessee, Texas, Florida and Arizona enjoyed among the highest net influx from other states. 

Consequently, those high-tax states now face steepening budget shortfalls.  New Jersey just reported a 35% drop in income tax revenue in December, Illinois now faces a $2.8 billion deficit, Connecticut a $4 billion deficit and New York a sudden $2.3 billion revenue shortfall. 

Instead of taking a long, hard look at whether their policies are suffocating their state finances, however, people like Cuomo blamed the 2017 tax law.  He noted that a New York City resident in the top income bracket now faces an astonishing 50.4% tax rate.  “A taxpayer in Florida,” Cuomo whined, “would see no increase, probably would see a decrease, and Florida also has the advantage of no estate tax.” 

Well, yeah, Governor Cuomo.  That’s sort of how it works. 

Now, Cuomo and leaders of seven other states - Connecticut, Illinois, New Jersey, Hawaii, Rhode Island, Washington and Oregon - are attempting to pressure the Trump Administration to reverse the 2017 tax reform.  At a National Governors Association conference this month, Cuomo went so far as to label the tax reform “diabolical.”  “It was a terrible political injustice that was done,” he added. 

Instead of scapegoating others for their own policy failures, those leaders should instead digest the response of Senate Finance Committee spokesman Michael Zona.  “The SALT deduction,” he said, “is a federal subsidy for states to raise taxes on their residents without political consequence.  The answer to the problem is for states to lower their taxes instead of insisting that taxpayers from lower-tax states subsidize their profligate spending.” 

Leftists remain stubbornly unlikely to heed that advice, however. 

As the 2020 presidential campaign quickly becomes a struggle among Democratic candidates to outrace their competition to the far left, some now advocate a return to 70% tax rates or higher.  But if leftists really seek higher tax rates, why all of their sudden jeremiads against the 2017 tax reform and SALT reductions?  Why do such people take deductions at all, if we’re to believe their claims of support for higher taxes?  Nobody is stopping them from continuing to pay higher rates, after all. 

The answer, of course, is obvious.  It’s one thing to virtue-signal in rhetoric, but walking the walk and facing the real-world consequences of leftist policy choices is an altogether different matter. 

Rather than scapegoat others for the consequences of their own actions, people like Cuomo should wake up to reality and adjust their policies accordingly.  The only remaining question is how many more residents they must lose to states like Florida, Texas and Arizona before they finally do. 

Question of the Week   
Which one of the following was the longest-serving U.S. Secretary of State?
More Questions
Quote of the Day   
 
"[A]s ICE prepared to conduct a nationwide operation, Democratic leaders such as Nancy Pelosi held a press conference to instruct those who have violated our nation's laws on how they can evade federal law enforcement. How they can evade the law. How what ICE is doing is un-American and they need to resist.Are you kidding me?The Speaker of the House, a lawmaker for decades, is instructing those who…[more]
 
 
—Thomas Homan, Former Acting Director of Immigration and Customs Enforcement (ICE)
— Thomas Homan, Former Acting Director of Immigration and Customs Enforcement (ICE)
 
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