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Fast Facts: Transportation Empowerment Act

Transportation Empowerment Act

  • Empowers states to set transportation spending priorities and enables them to determine the best funding sources.
  • Transitions control from federal to state over a five-year period, avoiding disruption.
  • Lowers the federal gas tax from 18.4 cents per gallon to 3.7 cents over the same time period; states would be free to increase their state gas taxes or find other funding mechanisms.
  • Reduces red tape, including the Davis–Bacon prevailing wage requirements and other federal mandates.
  • Enables greater private-sector participation in funding and financing capital-intensive projects

Heritage Research

Support From Others

  • “Shifting power toward taxpayers and their local and state governments is the right direction to take.” Kyle Wingfield, “End D.C.’s Highway Robberty,” Atlanta Journal-Constitution
  • “Congress has created the perception that all states are enriched by federal largesse, while it has created uses the money to keep control over any state that might stray into finding innovative solutions.” Dennis Polhill, Senior Fellow, Independence Institute, “A Chance to Bring Transportation Power and Money Back to the States,” Denver Post, December 6, 2013,
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Obama’s Plan to Tax the Internet

One of Washington’s well-known tricks is to set up unpopular legislation for lame duck passage. The continuing resolution (H.R. Res. 124) released on Tuesday night seems to set up another such violation of the will of the people.

While much of the attention surrounding the CR has rightly focused on the Export-Import Bank, the funding bill quietly tilts the scales on the debate over the internet sales tax. The CR contains just a 2-month extension of the Internet Tax Freedom Act (ITFA), which prevents states and localities from imposing taxes on internet access (sometimes called “email taxes”). This places the expiration of ITFA right in the middle of a lame duck session.

ITFA has enjoyed widespread support since it was first enacted in 1998. In fact, the House recently passed a bill, H.R. 3086, making the moratorium permanent, by a simple voice vote. The companion bill is sponsored and championed in the Senate by none other than the Chairman of the Finance Committee, Sen. Ron Wyden (D-OR) 12%.

Despite this clear mandate for a permanent extension, pro-internet sales tax members of the Senate are holding a permanent solution hostage to try to jam through their unpopular tax on internet sales, ironically known as the Marketplace Fairness Act. Sensing that the time was not quite right to try their internet sales tax gambit in weeks before an important national election, the members engaged in a strategic retreat on the issue, calculating that their best chance of passing their plan would be with a short-term extension of ITFA that pushed the issue into the lame duck.

The CR that could be voted on as soon as Thursday plays right into the hands of the pro-internet sales tax crowd. Instead of demanding Senate action on the House’s permanent ITFA extension (and holding the hostage-takers accountable if Americans’ internet bills went up in October), the CR lets the pro-internet sales tax crowd off the hook, releases them from their political bind, and sets them up nicely for their ultimate goal.  All this despite the fact that their position is unpopular and would not win out in the court of public opinion.

And just how unpopular is the internet sales tax? Just 35% of Americans say they favor the idea. Two-thirds of self-identified Republicans and conservatives oppose the measure, and independents are not far behind, opposing by a 56%-37% margin. Even the majority of self-described Democrats oppose the internet sales tax.  And, far from being an uninformed opinion, the polls swing less favorably when respondents are given more specific descriptions of the internet sales tax legislation being promoted in Congress.

That the internet sales tax is unpopular is clear. It is also bad policy, effectively increasing Americans’ taxes and violating principles of federalism, government taxing power, tax competition, and regulation without representation. There is no excuse for Congress intentionally punting on the issue to a time when the American people’s ability to hold their representatives accountable is lowest.

The internet sales tax cannot withstand public scrutiny. It can only be pursued in a lame duck Congress. Unfortunately, that’s exactly what looks likely if the current CR is passed into law.

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Harry Reid: Taxing the Internet

When the House passed the Permanent Internet Tax Freedom Act (H.R. 3086) earlier this week by voice vote, there was reason to hope (yes, hope!) that the Senate would do the same.  Nothing is ever easy in Harry Reid’s Senate, though.  CQ (sub. req’d) is reporting Reid is unlikely to take up the uncontroversial House-passed measure:

Senate Majority Leader Harry Reid of Nevada is supporting plans in a new bipartisan proposal that would package authorization for states to enforce online sales taxes together with another proposal to provide a 10-year extension of the ban on Internet access taxes that expires Nov. 1. 

The measure (S 2609) by Michael B. Enzi, R-Wyo., combines a continuation for 10 years of the soon-to-expire temporary ban (PL 110-108) on Internet service levies with provisions of a Senate-passed Enzi proposal (S 743) to authorize states to collect sales taxes from out-of-state online vendors. 

Enzi said in an interview that Reid made the case behind the scenes for including an extension for 10 years, instead of a permanent extension of the Internet service tax moratorium. “That’s what Sen. Reid put in,” Enzi said. 

Reid told reporters Wednesday, “We’ve had a number of meetings on that today, and … we’re trying to figure out a way to go forward. I think it’s fair to say that the two of them are going to be together. They’re not going to be separated.” 

Rather than pass a permanent ban on taxing Internet access, Reid wants to enact a temporary ban PAIRED with massive new taxing authority for state and local governments.

On Tuesday, Heritage Action’s Michael A. Needham warned against that strategy, saying, “The Permanent Internet Tax Freedom Act should not be held hostage to Washington special interests seeking to advance unpopular proposals such as an Internet sales tax.”

Reid’s approach is a non-starter in the House and likely with many of his Senate colleagues.  If Americans suddenly find their Internet access taxed later this year, they’ll know who to blame.

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A $1.5 Billion Federal Training Program

Today the House will vote on S. 1557, which would reauthorize the Children’s Hospital Graduate Medical Education (CHGME) program for five years. The bill passed the Senate under unanimous consent on November 12th, and it is coming to the House floor under suspension of the rules – an expedited process generally reserved for noncontroversial measures.

But should reauthorizing this program be considered noncontroversial?

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