Tommy Tuberville and Lance Gooden introduce the Stop Settlement Slush Funds Act
In advance of the Biden administration’s decision to finalize a rule that would revive the Obama-era policy of directing corporate settlement funds to third-party organizations, U.S. Senator Tommy Tuberville and Congressman Lance Gooden are reintroducing their Stop Settlement Slush Funds Act. The bill would prohibit the Department of Justice (DOJ) from allowing defendants to enter quid-pro-quo agreements that entail donations to third-party groups in exchange for reduced fines and tax deductions. This legislation would ensure that any settlements go only to the actual victims, injured parties in the dispute, or the U.S. Treasury. “The practice of funneling settlement dollars to political activists is an unacceptable abuse of the system,” said Sen. Tuberville in a statement. “If money is owed following a settlement agreement, every cent of that payout should go to those directly impacted by the defendants, or back to the Treasury. Public servants should not be allowed to use their influence to line the pockets of individuals who share the political views of the current administration.” Tuberville wrote on Twitter, “The Biden admin shouldn’t use the justice system to bankroll their partisan agenda. I introduced the Stop Settlement Slush Funds Act to stop DOJ from directing corporate settlement dollars to third-party, left-wing organizations instead of victims or @USTreasury.” Tuberville introduced this legislation in the last Congress. “Directing legal settlements to third-party groups is nothing short of legal extortion to fund the Biden Administration’s partisan agenda,” said Rep. Gooden. “Congress can no longer allow the Executive Branch to circumvent our Constitutional power of the purse to fund their activist pet projects and must pass my legislation to end this corrupt practice.” The Stop Settlement Slush Funds Act is endorsed by the National Taxpayers Union, Americans for Tax Reform, FreedomWorks, and Americans for Prosperity. Grover Norquist is the President of Americans for Tax Reform. “For too long, the Department of Justice has been misallocating settlement funds from civil suits to provide cash injections to political allies,” said Norquist. “This gross politicization of a government agency should be put to a stop immediately. I am proud to support Rep. Gooden’s bill to codify protections against the DOJ or any government official abusing their power to benefit special interest groups.” Adam Brandon, President of FreedomWorks, applauded the legislation. “The Stop Settlement Slush Funds Act would ensure that settlement dollars go to victims’ funds or to the general fund of the Treasury to be appropriated by Congress, which, as Article I of the Constitution requires, holds the power of the purse over funds spent by the federal government,” said Brandon. “It’s critical that Congress reins in the executive branch and assert its Article I powers, the Stop Settlement Slush Funds Act is a crucial part of this effort.” Alex Milliken, Policy and Government Affairs Manager at the National Taxpayers Union, thanked Gooden and Tuberville. “NTU supports the Stop Settlement Slush Funds Act and applauds Congressman Gooden and Senator Tuberville for working together to protect taxpayers,” said Milliken. “The practice of diverting billions of settlement dollars out of the hands of victims and toward third-party groups is a dubious practice. Congress should act quickly to put a stop to this agency behavior and prevent the misuse of resources to promote partisan agendas.” The Stop Settlement Slush Funds Act would prohibit settling parties in a federal dispute from reducing their punishments by making “donations” to outside organizations. This was a common practice under President Barack Obama’s presidency. The Obama Justice Department almost routinely required settling parties to pay a portion of their settlement obligations, under the guise of “donations,” to outside groups of the Department’s choosing. Republicans claimed that most of those groups pushed a partisan agenda. Tuberville and Republicans claim that this practice turned federal settlements into “liberal slush funds.” President Donald Trump halted the practice when he was President. Proponents of this legislation argue that without it, the Biden DOJ is expected to finalize a rule allowing the practice to continue to bolster a progressive policy agenda. Original cosponsors in the U.S. Senate include Senators Thom Tillis (R-North Carolina), Tom Cotton (R-Arkansas), Rick Scott (R-Florida), and Cynthia Lummis (R-Wyoming). Congressman Gary Palmer is an original cosponsor of this legislation in the U.S. House of Representatives. Other Congress members cosponsoring this include Reps. Scott DesJarlais (R-Tennessee), Tom Tiffany (R-Wisconsin), John Moolenaar (R-Michigan), Blaine Luetkemeyer (R-Missouri), Scott Perry (R-Pennsylvania), Darrell Issa (R-California), Randy Weber (R-Texas), Andy Biggs (R-Arizona), Claudia Tenney (R-New York), Jake Ellzey (R-Texas), and Ben Cline (R-Virginia). Tuberville is in his first term in the Senate, having been elected in a landslide in 2020, unseating incumbent Sen. Doug Jones. Tuberville is a native of Arkansas who spent forty years teaching, coaching, and sports broadcasting. He and his wife live in Auburn. To connect with the author of this story or to comment, email brandonmreporter@gmail.com.
Email Insights: Americans for Tax Reform write legislators to oppose franchise bill
The national group Americans for Tax Reform has weighed in to oppose the “Protect Alabama Small Businesses Act.” This bill, House Bill 352 sponsored by Representative Connie Rowe and Senate Bill 129 by Senator Chris Elliott, passed the senate last week and headed to the House committee on State Government. The letter follows more than 80 franchise brands who have also weighed in to oppose the pending legislation, which they say would cost Alabama around $1 billion in lost economic output. That group has set up a website www.protectalabamabusiness.org to counter what they call the myths surrounding the legislation. Read the letter in full below: To: Members of the Alabama House of Representatives From: Americans for Tax Reform Re: House Bill 352 and Senate Bill 129 (as substituted) Dear Representative, On behalf of Americans for Tax Reform and our supporters across Alabama, I urge you to vote NO on HB 352 and SB 129 (as substituted). If you talk to business owners today, many will tell you that the onerous and costly regulations are just as much, if not more of a problem than burdensome taxes. Yet HB 352 and SB 129 would make that problem worse by raising the regulatory cost of doing business in Alabama. Furthermore, this bill is a non-solution in search of a problem. These companion bills seek to have Alabama state government inappropriately meddle with private contract negotiations between franchisors and franchisees. According to industry estimates, passage of HB 352 and SB 129 would diminish Alabama’s economic output by $1 billion over the next decade. Enactment of HB 352 or SB 129 could shut off a proven path for Alabama residents to become small business owners, to the detriment of consumers and the economy as a whole. Passage of these bills would send the wrong message about Alabama – that it is hostile to investment, job creation, and commerce – at a time when it is most disadvantageous to send such a message. A Particularly Important Time to Reduce State Tax & Regulatory Burdens It’s no coincidence that the U.S. has reclaimed the number one spot on the World Economic Forum’s Global Competitiveness Index following the enactment of federal tax reform that significantly cut federal income tax rates, for both individuals and businesses. It’s clear that many investors, CEOs, and site selectors are bullish on the U.S. relative to other potential destinations for their capital. Yet once business owners or investors make the decision to bring new capital to or create jobs in the U.S., either by relocating or expanding operations stateside, they then have 50 choices before them when it comes to which state to choose. That’s why it is more important than ever for state legislators in Alabama to do everything they can to make the state a more attractive place to invest, do business, live, and raise a family. Imposing costly and unnecessary regulations, as HB 352 and SB 129 would do, would work at cross-purposes with that goal and indicate that Alabama is hostile to business. For these reasons, I urge you to vote NO on HB 352 and SB 129 (as substituted). Americans for Tax Reform will be educating your constituents, who are counting on you to protect their pocketbooks, as to how you and your colleagues vote on this and other important issues. I wish you the best of luck and I thank you for your public service. If you have any questions or if ATR can be of assistance, feel free to contact me or Patrick Gleason, ATR’s vice president of state affairs, at pgleason@atr.org or 202-785-0266. Sincerely, Grover G. Norquist PresidentAmericans for Tax Reform
Americans for Tax Reform targets Alabama’s gas tax increase
One of the nation’s most aggressive anti-tax groups has taken aim at Gov. Kay Ivey‘s proposed $300 million gas tax increase. Patrick Gleason, vice president of Americans for Tax Reform (ATR), called on state lawmakers this week to reject a stand-alone tax increase in favor of pairing it with “pro-growth” tax cuts elsewhere in the budget. “If it’s a stand-alone gas tax, we’ll be urging them to oppose it,” Gleason recently said on the Present Crisis Podcast, hosted by conservative Alabama writer J. Pepper Bryars. ATR has a history of fighting against tax increase. According to its website, it has launched major advertising campaigns against tax increases in the past. Gleason explained on the podcast it would be better for Alabama to first reform how its gas taxes are already spent, ending the practice of having them fund things that aren’t associated with transportation. Then, he said, pair a gas tax increase with reductions in taxes that stifle economic growth, like business taxes and personal income taxes, so that the overall tax burden doesn’t increase. “You could see a package taking shape that would not only be something that Americans for Tax Reform (would) not oppose, but could be something that we supported,” Gleason explained. Gleason looks at Alabama as an outlier right now — a a Republican governor following the footsteps of Democratic governors in states like Illinois, Connecticut, and California introducing a gas tax hike. “One of the exceptions to that is Alabama where we’re seeing a Republican governor push for a gas tax increase,” Gleason said. “That’s really made the state an outlier.” Gleason believes being the only state raising taxes in the southeast could harm the state’s efforts to attract businesses. “You’re competing with states that have been very aggressive in improving their codes and enacting pro-growth tax reforms,” Gleason said, pointing to recent tax cuts and major reforms in Mississippi, Tennessee, Florida and other nearby states. “You’re surrounded by a lot of very competitive states that are already competitive in terms of what their tax and regulatory climates look like, but they’re still aggressively looking for ways to improve.” ART plans to study Alabama’s gas tax bill more in depth once it’s introduced. “We will be vigilant,” he said. You can listen to the interview on the Present Crisis Podcast below:
J. Pepper Bryars: Gas tax increase should be ‘Even Steven’ – raise one tax, lower another
Can Alabamians support raising our gas tax for better roads while remaining true to our belief in limited government and protecting a beneficial, low-tax environment for our businesses, our families, and our future? Yes … if taxes are lowered elsewhere so that the overall amount of money taken from the people doesn’t increase. The concept is called “revenue neutral tax reform.” It essentially means that if Alabama raises one tax by $100 million next year, then it should have a comparable decrease in something else. So, if you’re going to pay an extra $400 at the gas station, you should save an extra $400 at the grocery store. Even Steven. A solid majority of Alabamians support the revenue neutral approach, as well. Nearly 62 percent of respondents said they’d support raising gas taxes if grocery taxes were decreased by the same amount, according to a statewide poll commissioned earlier this month by the Alabama Forestry Association. But why shuffle taxes around if it doesn’t ultimately change the government’s total haul? Because taxes change behavior, encouraging some actions while discouraging others, and they also impact people differently. Everyone who pays taxes on a gallon of gas uses roads and bridges. Fair enough. But the rich man and the poor widow pay the same tax on a gallon of milk. That may not be entirely fair, or at least not kind, especially if that tax is relatively high. Shuffling things around can also simplify things, making taxes predictable and sustainable for both the citizen and the state. And lowering those that discourage economic growth may actually produce more revenue in the long term. In our nation’s great laboratory of democracy, Alabamians can look near and far to find examples of how raising the gas tax has worked well in other states. In 2017, Tennessee raised its gas tax by 6 cents, its natural and liquefied gas tax by 8 cents, and its diesel fuel tax by 10 cents. To balance the scale, it cut the sales tax on food from 5 to 4 percent, decreased certain taxes on its state’s manufacturers, and eliminated taxes on some income from bonds, notes, and stocks. In one swoop, Tennessee improved its roads, lowered the cost of food, and removed obstacles to job growth and investment. And in the end, they were Even Steven. Americans for Tax Reform, the watchdog group known for its fierce opposition to tax increases, didn’t oppose Tennessee’s plan. Its president, Grover Norquist, found it didn’t violate their popular Taxpayer Protection Pledge that many candidates sign during election season. Tennessee’s voters were pleased with the result and reelected the Republican majority to the legislature the following year. Americans for Tax Reform also supported former Gov. Chris Christie’s efforts to raise the gas tax in New Jersey in 2016. His plan raised gas taxes there from 14.5 cents to 23 cents per gallon, but eliminated the state’s death tax, lowered its sales tax from 7 percent to 6.6 percent, and increased the earned income tax credit. Even Steven. Same goes for South Carolina. Americans for Tax Reform supported then Gov. Nikki Haley’s plan to combine an increase in gas taxes with a significant decrease in the state’s income taxes on individuals, families, and small businesses. Again, Even Steven. Unfortunately, there are other examples of how gas taxes were raised without the benefit of lowering anything else. They either failed to pass or, ultimately, harmed the communities they sought to help. We must remember that high taxes are one of the chief reasons why people and businesses are fleeing places like New York for places like Alabama. And there are also other reform measures that Alabamians should consider during this debate that were raised in a recent report issued by the Alabama Policy Institute. Meanwhile, our lawmakers should remember another lesson from Tennessee’s experience raising their gas tax – the need for open debate about the details. The chairman of the transportation committee in the Tennessee House of Representatives, State Rep. Barry “Boss” Doss, was accused by some of breaking the chamber’s rules so he could “ram” through the gas tax increase. He ended up drawing a challenger in the Republican Primary and ultimately lost his seat, and some say his parliamentary maneuvers were partly to blame. They say history doesn’t repeat, but it does rhyme. If that’s the case, let’s hope Alabama’s lawmakers will be less like Boss Doss by being transparent in the process and more like Even Steven by balancing any increase in the gas tax with decreases elsewhere. J. Pepper Bryars is a senior fellow at the Alabama Policy Institute. Follow him on Twitter at @jpepperbryars.
DC taxpayer watchdog Grover Norquist calls on Kay Ivey, lawmakers to resist gas tax hike
When the Alabama Legislature convenes in March one of the first things lawmakers are poised to consider is raising the state’s gas tax in order to help fund infrastructure improvements. But DC-based taxpayer watchdog Grover Norquist on Friday sent a letter calling on Alabama lawmakers to resist the urge to raise taxes, saying gas tax hike would “claw back the federal tax relief that their constituents received thanks to passage of the Tax Cuts & Jobs Act” last year. Norquist’s, founder and president of Americans for Tax Reform (ATR), call comes in the wake of Alabama House Majority Leader Nathaniel Ledbetter saying a gas chance is likely to pass this legislature this session. “While there are many opportunities to improve Alabama’s tax and regulatory climate, it’s important to first do no harm,” Norquist wrote in the letter. “As such, I urge that you reject the aggressive, but misguided push to hike the state gas tax, a proposal that would diminish and, in some cases, could totally erase the relief that your constituents have received from federal tax reform.” Looking to Ivey for support Norquist appears to have a particularly watchful eye on Alabama, keeping track of Gov. Kay Ivey and weighing-in on the state’s spending. In fact, he is counting on Ivey to stand up to the state legislature and veto a tax-hike if necessary. “There is a ‘secret’ plan to hike gas taxes after the election in Alabama. Good news is that Alabama Governor Kay Ivey has signed the Taxpayer Protection Pledge promising all Alabama voters she would veto any gas or other tax hike,” Norquist tweeted ahead of the general election. There is a “secret” plan to hike gas taxes after the election in Alabama. Good news is that Alabama Governor Kay Ivey has signed the Taxpayer Protection Pledge promising all Alabama voters she would veto any gas or other tax hike.#ALpolitics — Grover Norquist (@GroverNorquist) October 26, 2018 Ivey is listed as an “active” signer of the Taxpayer Protection Pledge, which asks candidates for federal and state office to commit themselves in writing to oppose all tax increases. ATR considers the pledge “binding as long as an individual holds the office for which he or she signed the Pledge.” Ivey signed the pledge Feb. 12, 2010 ATR State Relations Coordinator, Miriam Roff, confirmed to Alabama Today. At the time she was running in a crowded field for governor. Less than a month after signing the pledge, Ivey abandoned her run for governor and qualified to run for lieutenant governor. Ivey handily won the 2010 election for lieutenant governor, but it wasn’t until former Gov. Robert Bentley‘s resignation in April 2017 did Ivey find herself catapulted to the office of governor. In Nov., Ivey was elected to her first full-term as governor. Alabama Today reached out to Ivey’s campaign ahead of the election to see if Ivey was still standing by her pledge, but did not receive a response. Nor does it appear that the Ivey campaign reached out to ATR for a correction if she’s against keeping her pledge. Read Norquist’s full letter below: To: Members of the Alabama Senate From: Americans for Tax Reform Dear Senator, With the 2019 legislative session only a few months away, I write to encourage you and your colleagues to use the coming year to enact reforms that will help grow the state economy and protect taxpayers. While there are many opportunities to improve Alabama’s tax and regulatory climate, it’s important to first do no harm. As such, I urge that you reject the aggressive, but misguided push to hike the state gas tax , a proposal that would diminish and, in some cases, could totally erase the relief that your constituents have received from federal tax reform. Attempting to impose a regressive tax hike that will do the greatest harm to households who can least afford it is already bad enough. It’s even worse when it has already been documented that existing transportation dollars are not appropriately spent. Ballot measures to hike state gas taxes were resoundingly rejected in Missouri, Utah, and Washington State just last month. Between that and the throngs of French citizens now protesting President Emmanuel Macron’s gas tax hike, which he just suspended, it’s clear that gas tax hikes are a political loser, both at home and abroad. In addition to being terrible politics, the proposed gas tax increase is also bad policy. Consider that a state gas tax increase would counteract the benefits of federal tax reform and eat into Alabama taxpayers’ federal tax cut savings. This is one of the reasons why Congress has declined to raise the federal gas tax, despite pressure for them to do so; the same sort of misguided pressure that is currently being applied to you and your colleagues. According to Strategas Research Partners, 60% of the federal income tax cut would be wiped out by a $0.25 gas tax increase and rising prices: It’s no coincidence that the U.S. has reclaimed the number one spot on the World Economic Forum’s Global Competitiveness Index following enactment of federal tax reform that significantly cut federal income tax rates, both personal and corporate. The United States is a more attractive destination for investment and commerce following the enactment of federal tax reform, and global capital flows are expected to shift to the U.S. as a result. It’s clear that many investors, CEOs, and site selectors are bullish on the U.S. relative to other potential destinations for their capital. Yet once business owners or investors make the decision to bring new capital or create jobs in the U.S., either by relocating or expanding operations stateside, they then have 50 choices before them. That’s why it is more important than ever for state legislators in Montgomery to do everything they can to make Alabama an attractive place to invest, do business, live, and raise a family. This is why it is so critical for lawmakers to reject economically harmful policies, such as the proposed gas tax hike, that would make Alabama a
Martin Dyckman: Mike Huckabee’s tax plan is huckster’s scheme to slam seniors
There’s a Republican running for president who promises unequivocally to “protect Social Security and Medicare … to kill anything that poses a threat to the promises we have made to America’s seniors.” But he’s also calling for a “tax reform” that would bleed seniors as they’ve never been bled before. What do you call such a politician? Huckster, for one. Fraud, for another. Mike Huckabee, to be specific. “Robbing people of the benefits they have contributed is not a solution – it’s an escape,” says his website. Yet Huckabee is also the arch apostle for the so-called “Fair Tax,” which would replace income and payroll taxes with a national sales tax at likely 50 percent. Half again, in tax, added to what you pay for food, clothing, utilities and other necessities. Half again in tax, even on what you pay for doctors, medicine and insurance. That 50 percent isn’t a wild guess. It’s the sober estimate of Citizens for Tax Justice, a liberal group, and the bipartisan congressional Joint Committee on Taxation, on what it would take to replace current revenue from income and payroll taxes. The tax rate could be much less, of course, if a President Huckabee shut down the Pentagon, abolished food stamps, sold off the national parks and forests, and stopped putting money into the Social Security and Medicare trust funds. This radical scheme is Huckabee’s bid to win over the economically subversive wing of the Republican Party, epitomized by Grover Norquist, whose stated mission is to make the federal government small enough “to drown it in a bathtub.” Norquist and his fellow travelers have opposed Huckabee on account of some decent things he did as governor of Arkansas. Norquist himself won’t mistake Huckabee for a potential winner. But there are ordinary folk, in the Tea Party and elsewhere, who are susceptible to anti-IRS propaganda. Huckabee needs them. He figures to have a lock already on the party’s other extreme wing, the religious conservatives whose growing influence terrified even Barry Goldwater. It’s deceptively easy to dismiss Huckabee as a fringe candidate who might win early primaries in atypical states like South Carolina, but who wouldn’t be able to finish the race. One trouble with that view is in the damage he could do along the way to the not-so-whacko candidates in the Republican presidential rumble. Another is that he might give a camouflage of respectability to a “tax reform” scheme that’s beyond wrong: It’s fundamentally evil. It would switch the entire base of federal taxation from what people earn to what they spend, and from they earn to what they have saved — in many cases, on money they saved after paying taxes on it. Consider an elderly couple subsisting on Social Security, augmented by withdrawals from their small savings account. They spend all of it on necessities, most of which the states already tax. The federal government taxes none of it now. If your only income is Social Security, it is entirely exempt from the federal income tax. For those with other income, no more than 85 percent of Social Security is taxed. But while Huckabee’s scheme leaves that as it is, it would heap an enormous new federal tax on what that couple spends on necessities from their Social Security income and savings. For others whose income is great, the “Fair Tax” promises a windfall. According to the Institute on Taxation and Economic Policy, the top 1 percent would see their taxes fall by an average of $225,000 a year. Meanwhile, eight of every 10 Americans would be paying $3,200 more. There is a case that a sophisticated form of national sales taxation could make American exports more competitive and in that way contribute to the economy. The value-added tax common in Europe refunds the levy on goods taken or shipped out of their countries. The late Sam Gibbons, the Florida congressman who briefly chaired the House Ways and Means Committee, had this in mind when he proposed a value-added tax. But recognizing its regressive effect on most people, he would have offset it with a straight levy – with no exemptions – on higher incomes. However, that’s far from the case Huckabee is making. His is a cynical concoction of simple solutions – abolish the Internal Revenue Service, replace it with a national sales tax that the states would collect for Uncle Sam, and call it a day. This is what Huckabee claims: “The Fair Tax is the only plan that lowers everyone’s tax rates, untaxes the poor, broadens the tax base and helps protect Social Security and Medicare.” The last person who sounded like that was Bernie Madoff saying, “Just trust me.” Martin Dyckman is a retired associate editor of the St. Petersburg Times. He lives in Western North Carolina.
