Increasing taxes on liquids and services: April 23, 2013

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Dear Friends and Neighbors,

In my last e-mail, I shared that the governor was proposing more than $1 billion in tax increases to balance the budget. House Democrats followed suit, and proposed a budget depending on those tax increases. The House voted on the budget April 12, and I voted “no” because it is yet again unsustainable and depends on tax increases.

However, the tax package was not introduced until last week, in the form of House Bill 2038. The public hearing on this tax package was held Friday, April 19. You can watch the hearing in two segments here and here.

The proposal aims to make temporary taxes permanent on service industries (like accountants, barbers, dentists, real estate agents, physicians and veterinarians) and beer, expanding it to microbrews. It also proposes to “close tax exemptions” (i.e. increase taxes) on bottled water and several small business sectors, including janitorial services, insurance agents and many more. Many of them shared their struggles as small business owners to keep employees, pay their mortgages and get through this unstable economy. Unfortunately many of these businesses would have to pass their increased taxes along to consumers in order to stay afloat, which means all of us are affected.

The same day as the hearing on the operating tax proposal, House Democrats held a hearing on another tax increase proposal, House Bill 1954 – this one to increase the gas tax by 10 cents a gallon over four years.

It’s fascinating to me that the majority party wants to tax liquids from those you drink with friends to those you drink while camping to those you use to find a job. This reminds me of what Ronald Reagan once said, “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

Since there are a few industries in our state that are still moving, Democrats want to tax them. Here’s a comparison of the proposed taxes on liquids per gallon:

(all numbers are per gallon)	Bottled water	Gas	Beer (large breweries)	Beer (microbreweries)
Current:	0 cents	37.5 cents	76 cents – scheduled to sunset July 1 and be 26 cents	15 cents
Proposed:	10-12 cents, depending on which county you live in	47.5 cents (by 2018)	51 cents	30 cents

The people have clearly spoken on taxes, and especially our 13th District. Bottled water taxes were rejected as part of a package on the ballot in 2010. A new gas tax was soundly rejected (85 percent) by those who participated in our 13th District telephone town hall meeting, as well as 71 percent of statewide voters in an official Elway poll. People just can’t afford to pay more at the pump, especially when they need their cars to find work!

Beer taxes were sold as “temporary,” and excluded microbreweries. Now Democrats want to make the tax permanent, causing further damage to the public’s trust, and expanding it to smaller companies like our own Iron Horse Brewery. These are companies that not only provide jobs to hardworking people, they take an active role in their communities and support education and the homeless on their own time and by choice. A group of people from across the state rallied on the Capitol steps to ask the Legislature to let this “temporary” tax sunset as promised, see the photo at right.

I encourage you to share your comments on the operating budget tax proposal online and with members of the House Finance Committee. You can share your comments on the gas tax proposal online, though the Transportation Committee already moved the bill forward for consideration by the entire House. I plan to vote “no” if it comes up for a vote.

You can also call the Legislative Hotline toll-free at (800) 562-6000 and ask to share your opinion with members of the Democrat party who are in control in the House.

I’m here to serve you – please contact my office if you have any questions, concerns or suggestions.

Sincerely,