Serious, Pro-Growth Tax Reform Must Contain 100 Percent Immediate Full Business Expensing

Posted by John Kartch on Wednesday, August 24th, 2016, 12:12 PM PERMALINK

Clinton plan fails, retains complex depreciation schedules and offers no income tax rate reduction for anyone

Under the tax code, business owners cannot immediately expense the cost of purchasing equipment against their taxable income. Instead, they have to deduct, or “depreciate,” these costs over several years depending on the asset they purchase, as dictated by complex and arbitrary IRS tables.

These rules create needless complexity, and force business owners to make decisions based on tax, not management reasons. Any serious, pro-growth tax reform plan should eliminate depreciation in favor of 100 percent immediate full business expensing, as both the Donald Trump and House Republican plans call for.

With the existing depreciation schedules, business purchases are treated differently under the tax code, with no clear pattern or common theme. Businesses have two different systems of depreciation and investments can be depreciated over 3, 4, 5, 7, 10, 12, 14, 15, 20, 25, 27.5, 30, 35, 39, 40, or 50 years depending on the system used and the asset purchased.  

This creates a complex and confusing system for business owners that distorts business decisions, as the House Republican “Better Way” tax reform blueprint explains:

“For each asset, they must determine the period over which the asset may be depreciated or amortized and the method that must be used to determine the annual allowance with respect to the asset. For many assets, the cost must be spread over many years for tax purposes. This means that businesses are taxed today on the earnings they reinvest in growing their operations and can recover the cost of that investment only many years later.”

Not only would 100 percent immediate full business expensing eliminate needless complexity in our tax code, it would also lead to strong economic growth. According to research by the Tax Foundation, full business expensing would result in 5.4 percent higher long-term GDP, would create more than 1 million full time jobs, and would increase after-tax income by 5.3 percent.

There is clear rationale for policymakers to implement a cash flow system that allows businesses to immediately expense their purchases. This would make the tax code consistent and clear, and stop it from picking winners and losers.

Fortunately, plans released by the Donald Trump presidential campaign and by House Republicans led by Speaker Paul Ryan (R-Wis.) and Ways and Means Chairman Kevin Brady (R-Texas) would both allow 100 percent immediate full business expensing.

The Hillary Clinton plan – a collection of tax increases on the American people topping $1 trillion over ten years – retains the old, job-killing regime of Byzantine depreciation schedules. The Clinton plan also calls for a complex capital gains tax hike, a Death Tax hike, and no income tax rate reduction for anyone.

The fact is, keeping the existing system of depreciation hurts economic growth and adds a confusing and unnecessary layer to the tax code. 100 percent immediate full business expensing should be in any serious pro-growth tax plan, Democrat or Republican.

Americans for Tax Reform is tracking all of Hillary’s tax increase proposals at its dedicated website,

See Also:

Norquist Statement on Clinton Tax Plan

Top Comments

Norquist Statement on Clinton Tax Plan

Share on Facebook
Tweet this Story
Pin this Image

Posted by John Kartch on Tuesday, August 23rd, 2016, 4:56 PM PERMALINK

The following statement can be attributed to Grover Norquist, president of Americans for Tax Reform:

“The small business community is excited about the House GOP and Trump tax reform approach with its rate reduction combined with 100 percent, immediate full business expensing and elimination of the Death Tax. Hillary fails on all counts. She doesn’t do rate reduction. She doesn’t do 100 percent, immediate full business expensing. She doesn’t kill the Death Tax, she hikes it. She doesn’t do the powerful pro-growth approach of Trump and Paul Ryan. Hillary’s collection of tax increases – a $1 trillion net tax increase over ten years -- will make the code even more complex and even more burdensome.”

Americans for Tax Reform has documented all of Hillary’s proposed tax increases at its dedicated website,

See Also:

Full List of Hillary’s Planned Tax Hikes 

Hillary’s $250,000 Tax Pledge Flip Flop 

Clinton Tax Returns Show Death Tax Hypocrisy

Hillary is Painfully Clueless About the U.S. Corporate Income Tax Rate

“Everyman” Tim Kaine Tried to Raise Taxes on Adult Beverages  

Hey Hillary, the Tax Code is Already Steeply Progressive

Hillary is Open to a Carbon Tax, Says Campaign Chief

Democrat Platform Calls for Carbon Tax  

Hillary’s “Free Wifi” Plan is a $275 Billion Tax Hike

Bernie Sanders Slams Hillary’s Soda Tax: “This proposal clearly violates her pledge.” 

Footage Shows Hillary’s 25% Gun Tax Endorsement

Hillary Admits She Would Not Veto Middle Class Tax Hikes


Photo Credit: 
Anand Dhingra

More from Americans for Tax Reform

Top Comments

Hefty IRS Tax Bill Awaits Home-Bound Victorious Olympic Medalists

Share on Facebook
Tweet this Story
Pin this Image

Posted by Natalie De Vincenzi on Monday, August 22nd, 2016, 4:35 PM PERMALINK

The Olympics are over and the 558 members of Team USA are headed home having won 121 medals. Tallying 46 gold, 37 silver, and 38 bronze medals, Team USA athletes could owe the IRS hundreds of thousands of dollars in “victory” taxes.

As Olympians set foot back in the U.S., now is the time to pass much needed legislation that will exempt these athletes from being taxed. In March 2016, Sen. John Thune (R-S.D.) introduced a bill (S. 2650) to stop the IRS from taxing Team USA medalists. The bill passed the Senate by unanimous consent on July 12, but the House has yet to pass a bill. Recently, the House Ways and Means Committee will mark up a bill come September, sponsored by Congressman Bob Dold (R-Ill.) and Congressman Blake Farenthold (R-Texas).

Kevin Brady (R-Texas), House Ways and Means Chairman, has highlighted the importance of passing Congressman Farenthold and Dold’s bill:

"It seems like a small thing, but when America’s Olympians and Paralympians bring home the gold, our nation should congratulate them — not send the IRS to claim a share of their medal."

U.S. Olympic athletes receive a monetary award for winning a medal. This award is considered regular income, and is therefore subject to taxation. The U.S. Olympic Committee rewards its medalists with $25,000 for gold, $15,000 for silver, and $10,000 for bronze.  

Taxes on these awards are as high as $9,900 per gold medal, $5,940 per silver medal, and $3,960 per bronze medal. These are the maximum possible tax amounts, and vary widely based on an individual’s tax brackets, circumstances, and available deductions. Still, the athletes must reckon their medal winnings with the IRS code, a headache they can do without.

                           Maximum Prize Tax             

Gold                                     $9,900                  

Silver                                    $5,940                  

Bronze                                  $3,960     

Americans who wish to express their support for the House bill can do so through the petition here or sign below:

Photo Credit: 
Thomas Hawk

More from Americans for Tax Reform

Top Comments

Obamacare Insurers Fleeing Exchanges and Hiking Premiums

Share on Facebook
Tweet this Story
Pin this Image

Posted by Natalie De Vincenzi on Thursday, August 18th, 2016, 2:44 PM PERMALINK

Insurers operating on Obamacare exchanges have requested an average premium hike of 24 percent across the country, according to independent analyst Charles Gaba.  Even as they request higher premiums, many insurers have announced plans to flee exchanges or reduce their involvement, leaving enrollees with fewer options and more expensive insurance.

Insurers’ requests for larger increases should not be surprising. Even with billions in subsidies, Obamacare’s failure to attract enough enrollees has caused an insurer exodus. In a 2016 fact sheet, the Centers for Medicare and Medicaid Services (CMS) reported that as of March 31, only 11.1 million consumers had planned on staying in Obamacare marketplaces. HHS on the other hand projected that the marketplace would have a lower enrollment at the end of the year—only 10 million.  Yet, these numbers are only half of what the CBO had originally projected, which was 24 million.

As enrollment numbers have failed to materialize, Obamacare insurers have not received the revenue that they had expected. This has led to two outcomes – higher premiums and fewer insurers operating on exchanges.

Large insurers have recently been revising their initial rate requests. In Tennessee, Cigna and Humana revised their rates up more than 20 percent. Cigna requested a 46 percent average increase, up from 23 percent, and Humana asked for a 44 percent increase, up from 29 percent.

So far, only 5 states have approved rate increases—Mississippi, New York, Oregon, Rhode Island, and Vermont. These 5 states have an average approved rate increase of 17 percent. While they only make up about 6.1% of the population, Gaba notes that the rate will undoubtedly fluctuate as larger states’ rates are accounted for.

One reason insurers are struggling to operate on exchanges is that they are failing to enroll enough young enrollees. Insurers need 40% of enrollees to be in the 18-34 age range in order to offset the costs of those who are older and typically rack up the insurance bill. However only 28% of exchange participants are in the golden 18-34 range, leaving insurers with a risk pool that is unsustainable.

Due to insurmountable losses, the nation’s largest insurer, UnitedHealth, will be pulling out of 26 of the 34 exchanges it participated in last year. Following United’s footsteps, Aetna announced yesterday that it would pull out of all but 4 states and remain in only 242 counties.

The exodus of insurers from Obamacare exchanges is not self-contained – it is leading to higher costs and more unaffordable insurance. The significant increases in rate requests is just another indicator that Obamacare is failing, but the larger than expected requests are showing that it is failing faster than expected. 

Photo Credit: 
Charles Fettinger

More from Americans for Tax Reform

Top Comments

California “Bullet Train” is a Taxpayer Train Wreck

Share on Facebook
Tweet this Story
Pin this Image

Posted by Toni-Anne Barry on Wednesday, August 17th, 2016, 4:57 PM PERMALINK

When something sounds too good to be true, it usually is. California taxpayers were conned into voting for a $9.95 billion “bullet train” boondoggle that has been on the verge of failure since its inception. The purported goal of the train is to transport travelers between Los Angeles San Francisco in under three hours, which allured a slim majority of Californians to vote in favor of the project in 2008.

The pushers of the plan claimed that the long term price tag would be $33 billion. Eight years later the cost has more than doubled, teetering over $68 billion. The $9.95 billion from taxpayers doesn’t come close to keeping the plan afloat and most investors won’t touch the project.

The California High Speed Rail Authority still claims that the project will not need to be subsidized by the federal government. The authority has told taxpayers that railway profits will be enough to finance the construction once the rail is running but projected ticket prices have already surged $30.

The assembly has passed a bill requiring the rail authority to reveal an in-depth analysis of all railway expenses but it will do little to stop the continual waste of time, money and resources.

An article from Reason Magazine highlighted the failure of this project:

Construction is already over two years behind schedule and the state has still not disclosed how they plan to raise the $53 billion in additional funds to complete the Los Angeles-to-San Francisco track.

This “bullet train” disaster will continue to be a massive burden for taxpayers. California needs to stop spending taxpayer dollars on a project that was never going to work.

Photo Credit: 

More from Americans for Tax Reform

Top Comments


Kraut, you are the laughable one, fast on the put downs, short on the facts. For a third of the cost of HSR, you could buy fleets of 20 737s and their successors and fly passengers for free 20X per day for decades. BTW, I'm a native Californian, born and bred, plan to die here. You?


Laughable. High speed rail will provide another efficient way to of transportation around California besides roads and planes. You are just another short sighted individual and sore loser who cant see past the end of his nose. If you don't like it, leave CA.


The best chance of stopping this bullet train boondoggle and saving taxpayers from a century or more of construction and operating debt totaling over $200 billion in the first 20 years is an initiative to defund the California High-Speed Rail Authority and redirect bonds for the train to critical infrastructure. California is the top in the national list of states with critically decrepit bridges and insufficient water infrastructure, but it wastes money on 18th century solutions when 21st century needs must be met.

Stealing Money from Travelers: How the DEA Can Search, Seize, and Profit Without a Warrant

Share on Facebook
Tweet this Story
Pin this Image

Posted by Krista Chavez on Wednesday, August 17th, 2016, 10:00 AM PERMALINK

An investigation spanning the past several months by USA Today found that the Drug Enforcement Administration consistently searches through American travel records to seize millions of dollars using civil asset forfeiture.

It claims to be looking for drug traffickers, but the agency rarely uses the information found to actually make arrests. According to the USA Today investigation, DEA agents work with Amtrak agents and officers from nearly every major U.S. airliner to seize millions from people carrying large amounts of money. The units seized more than $209 million from over 5,000 people over the past decade, but the DOJ only took 87 federal cases to court to seize cash from travelers.

Assuming these 87 cases were included in the 5,000 number, only 1.7% of all seizures actually get prosecuted in court for drug trafficking. If the DEA is actually “combatting major criminal activity,” then it would actually be arresting and prosecuting these so-called criminals.

The DEA has also built one of the largest wiretapping operations in U.S. history in the suburbs of Los Angeles according to USA Today’s research. These investigators intercepted over 2 million conversations from around 44,000 people, according to federal court records. This operation once accounted for 1/5 of all U.S. wiretaps. Investigators found that DEA agents used these wiretaps to seize drugs and millions of dollars in cash, and they would tip off other investigators from other agencies. DEA agents then instructed the investigators to conduct their own independent searches (aka. parallel construction).

Riverside County’s District Attorney noted that for every 3 wiretaps last year, 1 arrest was made-one of the lowest rates of any jurisdiction in the nation conducting wiretaps.

When the Justice Department found out about this, it expressed fears that “the surveillance issues are unlikely to withstand legal challenges.”

Even the DOJ warned that this practice could be determined illegal, but the DEA continued to illegally watch, search, and seize from American citizens.

The DEA also became close with Amtrak employees and wasted more taxpayer dollars. More USA Today research found that the administration paid an Amtrak employee more than $850,000 since 1996 to serve as a confidential informant for the agency to identify and combat contraband trafficking. This money did nothing, for the information received was always available to the DEA at no extra cost. Another employee also received money ($9,701) for information again freely available to the DEA. The administration’s Inspector General noted that the project not only violated federal regulations but also “substantially wasted government funds.

The Justice Department, in accordance with the Drug Enforcement Administration, must end its ridiculous crusade against the rights of Americans by stopping its illegal search and seizure practice done in the name of civil asset forfeiture. When the inspector generals and district attorneys warn the agency and it continues this process, the department needs to end its vicious, million-dollar tirade against taxpayers. 

Photo Credit:

More from Americans for Tax Reform

Top Comments

Unconstitutional, Dangerous Step Taken to Give Up the Internet

Share on Facebook
Tweet this Story
Pin this Image

Posted by Daniel Savickas on Tuesday, August 16th, 2016, 5:31 PM PERMALINK

The NTIA announced on Tuesday that it intends to allow the United States’ control over the Internet to expire on October 1st. This is a move that threatens to let more power fall into the hands of authoritarian governments.

In a statement, released on the National Telecommunications and Information Administration (NTIA) blog, the NTIA administrator, Larry Strickland, said, “Based on our review and barring any significant impediment, NTIA intends to allow the IANA functions contract to expire as of October 1.”

This will leave the Internet susceptible to authoritarian control.

The Internet Corporation for Assigned Name and Numbers (ICANN), the organization in question, has repeatedly refused to comply with Senate requests for information on its relationship with the Chinese government. It also employs a former key member of Egyptian dictator, Hosni Mubarak’s, government as an advisor.

This decision raises constitutional issues as well. According to Americans for Tax Reform’s Executive Director of Digital Liberty, Katie McAuliffe:

“If NTIA doesn’t extend its contract with ICANN to administer the IANA functions Sept. 30, then all of the work that they've done since the beginning of 2016 in examining the transition would be in violation of the funding ban rider.”

A coalition of 25 interest groups signed on to a letter urging Congress to sue for this very purpose. NTIA has run afoul of an appropriations rider that, even Strickland admitted “does restrict NTIA from using appropriated dollars to relinquish our stewardship.”

This move by NTIA also comes in the midst of a debate in Congress to ensure all issues are ironed out and approved by the legislature before any definitive decision is made. This moves the timeline up significantly.

Photo Credit: 
Neil R

Top Comments


Congress will either move too slow or let it happen. They are not representing the will of the people Throw them out


Sadly there is no opposition party in the Untied States.

Study: Millennials Show Strong Support for the Sharing Economy

Share on Facebook
Tweet this Story
Pin this Image

Posted by Toni-Anne Barry on Monday, August 15th, 2016, 2:49 PM PERMALINK

David Binder Research together with Airbnb recently released a nationwide study showing strong support of the sharing economy among millennials.

The study polled 1500 Americans nationally: 500 millennials, 500 swing-state millennials, and 500 older adults aged 35 and over.

Key findings include:

  • 75% of millennials believe Airbnb helps middle income families support their homes
  • 81% of swing state millennials support Airbnb operating in their local area
  • 65% of swing state millennials believe the sharing economy is going to become more important to the economy in the next five to ten years

The study defined swing states as New Hampshire, Pennsylvania, Virginia, North Carolina, Florida, Ohio, Wisconsin, Michigan, Minnesota, Iowa, Colorado, Nevada, Arizona, and Georgia.


Photo Credit: 
Scott Lewis

More from Americans for Tax Reform

Top Comments


so is it bad that I'm a millennial, and have no idea what airbnb is? I hear "Sharing Economy" and immediately think that I'm going to get taxed more to "share" my income with others. ...don't know if that is the premise, but find it funny that millenials get blamed or get the finger pointing for that type of behavior...when most behaviors are learned.

If it is speaking to some home business concept, and just some new fluffy term to describe an entrepreneurial spirit to make an extra buck... why strain so hard? to google airbnb I guess.

Update: Ah, heard about this on the radio a couple weeks ago. ...yeah, going with second comment.

Oklahoma Places New Criminal Justice Measures on the Ballot in November

Share on Facebook
Tweet this Story
Pin this Image

Posted by Krista Chavez on Monday, August 15th, 2016, 9:30 AM PERMALINK

In November, Oklahomans will have the opportunity to cut crime and reduce big government in the courtroom.

State Questions 780 and 781 address Oklahoma’s overflowing prisons and high costs for criminal justice. SQ 780 reclassifies some low-level felony drug and property crimes as misdemeanors. SQ 781 requires the state to estimate the savings from these reclassifications and place that money towards recidivism prevention programs such as addiction treatment, education, and job training. It also increases funding or mental health treatment.

Studies show that by strategically reducing some sentences for non-violent offenses, crime rates can actually drop. Texas has taken this approach to great effect.

More than 110,000 Oklahoma voters signed petitions for these questions to go to a vote even though state law only requires 65,987 signatures.

Further, Oklahomans for Criminal Justice Reform will host several town hall events in the state to let local leaders advocate for the SQ’s. Leading the initiative is former House Speaker Kris Steele (R). During an interview with Oklahoma Watch, Steele notes that the measures would,

“Reduce the prison population, save money, and allow counties to make investments into evidence-based programming that improves public safety.

The budget for the Department of Corrections has grown by about 172 percent over the last two decades. And they’re still underfunded. There’s not enough money in the state of Oklahoma to pay for incarceration of all the people the Legislature wants to incarcerate.”

To improve the system, Oklahoma passed four major bipartisan bills into law on April 27th, 2016. H.B. 2472 gave prosecutors the discretion to file misdemeanor instead of felony charges for crimes not requiring offenders to serve 85% of their sentence, and H.B. 2753 expands drug courts and community sentencing for more defendants.  To fix mandatory minimum sentences, H.B. 2479 changes mandatory minimums and maximums for felony drug possessions. To fix property crimes, H.B. 2751 raised the threshold to be charged for property crimes.

These reforms aim to compliment the recent reforms. Oklahomans will give their own opinions about the criminal justice issue. State Questions 780 and 781 will be on the Oklahoma ballot in November 2016. 

Photo Credit: 
Matthew Rutledge

More from Americans for Tax Reform

Top Comments

Clinton Tax Returns Show Death Tax Hypocrisy

Share on Facebook
Tweet this Story
Pin this Image

Posted by Alexander Hendrie on Friday, August 12th, 2016, 2:44 PM PERMALINK

Death Tax for thee, but not for me.

Hillary Clinton has always pushed for a steep Death Tax on the American people. But when it comes to her own finances, it is a different story. Clinton’s newly released tax returns show she still uses tax avoidance strategies to shield her Death Tax liability.

According to a 2014 report by Bloomberg News, the Clintons created trusts in 2010 and shifted ownership of their New York home to it in 2011. In doing so, they will avoid paying hundreds of thousands of dollars in future death taxes.

As Bloomberg reports:

To reduce the tax pinch, the Clintons are using financial planning strategies befitting the top 1 percent of U.S. households in wealth. These moves, common among multimillionaires, will help shield some of their estate from the tax that now tops out at 40 percent of assets upon death.

The Clintons created residence trusts in 2010 and shifted ownership of their New York house into them in 2011, according to federal financial disclosures and local property records.

But Hillary Clinton’s official campaign website, in calling for a steep Death Tax hike, scolds:

She will also close complex loopholes, including methods that people can now use to make their estates appear to be worth less than they really are.

Oh! Let’s go back to the Bloomberg article:

Among the tax advantages of such trusts is that any appreciation in the house’s value can happen outside their taxable estate. The move could save the Clintons hundreds of thousands of dollars in estate taxes, said David Scott Sloan, a partner at Holland & Knight LLP in Boston.

“The goal is really be thoughtful and try to build up the nontaxable estate, and that’s really what this is,” Sloan said. “You’re creating things that are going to be on the nontaxable side of the balance sheet when they die.”


Clinton said that “the estate tax has been historically part of our very fundamental belief that we should have a meritocracy.”

The newly released Clinton tax return shows the continued use of an Article 4 Trust, as shown on Schedule E, page 2.

While Clinton is all too happy to use tax avoidance mechanisms, as a senator she voted against repealing the Death Tax and even voted against giving small businesses and families a higher level of Death Tax exemption:

  • In 2001, Clinton voted no on H.R. 1836, “the Economic Growth and Tax Reconciliation Act,” which contained a series of tax cuts, one of which increased the Death Tax exemption level to $3.5 million.
  • In 2005, Clinton voted no on H.R. 8, “the Death Tax Repeal Permanency Act of 2005,” which fully repealed the Death Tax.
  • In 2006, Clinton voted no on H.R. 5970, “the Estate Tax and Extension of Tax Relief Act of 2006,” which increased the Death Tax exemption level to $5 million.
  • In 2008, Clinton voted no on S.Amdt.4191, legislation to increase the Death Tax exemption level to $5 million.

If Clinton truly believes the Death Tax is about the “fundamental belief that we should have a meritocracy,” she should put her money where her mouth is and pay up.

See also: 

Photo Credit:

More from Americans for Tax Reform

Top Comments

Laniakea Official

Riiiiiiiight......... Suuuure he did.


The only president to effectively raise taxes on the rich was Ronald Reagan. And he did it along with lowering taxes on the middle class. He lowered the tax rates for everyone, but eliminated the loopholes used by the rich to avoid paying taxes. The progressives have been working ever since to reverse what he did.