John Kartch

IRS "Loses" Years of Lois Lerner Emails

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Posted by John Kartch on Friday, June 13th, 2014, 4:11 PM PERMALINK


Today, the IRS claimed to the House Ways and Means Committee that it has "lost" two years' worth of emails from notorious tea party harasser and disgraced IRS employee Lois Lerner.

In response, ATR president Grover Norquist said the following:

This is the worst attempt to blame technology in service of a cover-up since the infamous "18-minute gap" during the Nixon Watergate crisis. Only in this case the gap is not 18 minutes, but two years. This cover-up is far worse.

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Obamacare Taxes: Next Filing Season Could Be "one of the most chaotic in years."

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Posted by John Kartch on Tuesday, June 10th, 2014, 10:25 AM PERMALINK


Problems with a key component of Obamacare will lead to unpleasant surprises for Americans during the 2015 tax filing season, according to testimony from a top tax expert before the House Ways and Means subcommittees on Health and Oversight today.

“I am here today to tell you that the upcoming tax filing season has the potential to be one of the most chaotic in years,” said Ryan Ellis, an IRS Enrolled Agent and Tax Policy Director at Americans for Tax Reform.

According to the testimony:

“One of the key elements of the Affordable Care Act, popularly known as “Obamacare,” is the creation of advanceable tax credits for the purchase of exchange health insurance plans. 

Taxpayers applying for credit assistance must be evaluated by government entities ranging from the SSA to CMS to the IRS.  The goal is to have an educated estimate, based on the most immediately-available government documents (e.g. prior year tax returns, etc.), of the taxpayer’s probable income for the year--which in turn determines the size of the tax credit. 

In an effort to get this tax benefit out quickly, the estimated credit is advanced to the insurance company by the IRS, which applies it to customer premiums. 

This is an important point—the money has left the IRS’ hands up to over a year before the taxpayer actually calculates his final credit amount.  The insurance companies have collected it, and they are not required to pay it back. 

Press reports this month indicated that the government was having a hard time doing all this, with 1.2 million of the 6 million federal exchange applicants having to be asked for additional income verification information from CMS.   That is not surprising.   Applicants are asked to complete a detailed, confusing twelve-page application which asks for income, family size, etc.  It is rather like trying to fill out a 1040 on the fly.  Added to this is the lack of employer reporting requirements and the failure to complete the back-end of the web site. 

Inconsistencies--some of which are the result of failures of the healthcare.gov system, some of which are poor records from the government, and some of which are mistakes from the individual--are not surprising.  But they are a problem.  It is the middle of June, and many people have now been receiving inaccurate subsidies for six months.  To the public’s knowledge, not a single advanced tax credit has been adjusted this year.

So what happens if the flawed, confusing process results in a tax credit larger than what the law calls for?

A hypothetical example might help illustrate: a health exchange customer selects an Obamacare exchange plan.  The government estimates that this taxpayer will earn $30,000 this year, which makes her eligible for a $2000 tax credit.  This $2000 is paid to the taxpayer’s insurance company to help with premiums. 

The next spring, our customer/taxpayer is filling out her tax return.  Unfortunately, the government estimated the taxpayer earned too little and paid too large a credit.  She actually earned $40,000, and so only had a $1500 credit coming to her. 

Depending on the taxpayer’s income level and availability of verified affordable workplace insurance, she will have to pay back much or all of the $500 overage to the IRS.  This means skinnier refunds and maybe even liabilities, and it won’t be the taxpayer’s fault—it will be the government’s fault.

It is also inevitable that many people are receiving tax credits for which they are completely ineligible.  The firewall of the offer of employer sponsored insurance is a new concept — tax preparers will have difficulty figuring out how it works in operation. There is virtually no way to catch it on the front end — but come tax filing season, many people will end up owing thousands of dollars, and it will be a complete surprise.”

The hearing is now underway in 1100 Longworth and can be viewed live here.

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CBO: Four Million Americans to Pay Obamacare Tax

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Posted by John Kartch on Thursday, June 5th, 2014, 3:39 PM PERMALINK


Four million American taxpayers will be forced to pay the Obamacare individual mandate non-compliance tax in 2016, according to a newly released analysis by the Congressional Budget Office.

The report, titled Payments of Penalties for Being Uninsured Under the Affordable Care Act: 2014 Update, includes a gingerly-worded reminder ​that Americans will be liable for the tax as part of their annual tax-filing process:

“Among the uninsured people subject to the penalty, many are expected to voluntarily report on their tax returns that they are uninsured and to pay the amount owed.”

The CBO data also show that the overwhelming majority of those liable for the tax are part of low-to-middle income households, a clear violation of President Obama’s promise against “any form of tax increase” on Americans making less than $250,000 per year.

It is worth reminding Americans of Obama’s broken pledge:

“I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”  [Video]

Oct. 3, 2008: During a nationally televised Vice-Presidential debate in St. Louis candidate Joe Biden said:

 “No one making less than $250,000 under Barack Obama’s plan will see one single penny of their tax raised whether it’s their capital gains tax, their income tax, investment tax, any tax.” [Transcript]

Feb. 24, 2009: In an address to a joint session of Congress President Obama restated the promise in forceful terms:

“If your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not one single dime.” [Transcript] [Video]

April 15, 2009: During a White House press briefing, spokesman Robert Gibbs was asked if Obama’s tax pledge applied “to the health care bill.”  Gibbs replied:

 “The statement didn’t come with caveats.”  [Transcript] [Video]

Regardless of their eventual Obamacare tax liability, every American who files a tax return will be required to complete a new IRS form attesting to their “qualifying” health insurance status for each month of the year.

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Healthcare.Gov to Cost Taxpayers over $1 billion

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Posted by John Kartch, Ryan Ellis on Monday, May 19th, 2014, 4:00 PM PERMALINK


Healthcare.gov, the federal Obamacare website, will cost taxpayers over $1 billion, according to congressional testimony submitted by HHS nominee Sylvia Mathews Burwell.

In response to questions from Sen. Lamar Alexander (R-Tenn.) Burwell noted that $834 million had already been obligated to the glitch-prone website as of Feb. 28, with “a need for approximately $200 million” more from taxpayers through Fiscal Year 2015.

The full responses from Burwell are as follows:

Question: What has been the total cost of creating healthcare.gov to date? What has been the total cost of “fixing” healthcare.gov? Please include a detailed accounting of all costs associated with this website, including (but not limited to) salaries and expenditures, contractor costs, and training.

Answer: “It is my understanding that as of February 28, 2014, CMS has obligated a total of approximately $834 million on Marketplace-related IT contracts and interagency agreements. These expenditures include the website and the systems that support enrollment through the Marketplace, such as the data services hub as well as other supporting IT infrastructure, including cloud computing, to support Marketplace IT development.”

Question: What financial outlays are expected for fixing the backend of healthcare.gov? Please include a detailed estimate of future costs for fixing and maintaining the website, including (but not limited to) salaries and expenditures, contractor costs, and training.

Answer: “The President’s Budget reflects a need for approximately $200 million for all Marketplace-related IT in FY 2015, some of which is funded through user fees. Much of this amount reflects ongoing operational and maintenance costs of HealthCare.gov, as well as continued development."

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Obamacare’s Top Five Middle Class Tax Hikes

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Posted by John Kartch on Tuesday, April 15th, 2014, 3:53 PM PERMALINK


President Obama and his Democrat allies often claim they want to raise taxes only on those Americans they deem “rich.” What they forget to mention is that among the 20 new or higher taxes in Obamacare, at least seven directly hit families making less than $250,000 per year.  Below are the top five worst:

1. Obamacare Flexible Spending Account Tax:  The 30 - 35 million Americans who use a pre-tax Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs face a new Obamacare cap of $2,500. This will squeeze $13 billion of tax money from Americans over the next ten years. (Before Obamacare, the accounts were unlimited under federal law, though employers were allowed to set a cap.) Now, a parent looking to sock away extra money to pay for braces will find themselves quickly hitting this new cap, meaning they would have to pony up some or all of the cost with after-tax dollars. 

Needless to say, this tax will especially impact middle class families.

There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children.  Nationwide there are several million families with special needs children and many of them use FSAs to pay for special needs education. Tuition rates at special needs schools can run thousands of dollars per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. This Obamacare tax increase will limit the options available to these families. 

2. Obamacare High Medical Bills Tax: Before Obamacare, Americans facing high medical expenses were allowed a deduction to the extent that those expenses exceeded 7.5 percent of adjusted gross income (AGI). Obamacare now imposes a threshold of 10 percent of AGI. Therefore, Obamacare not only makes it more difficult to claim this deduction, it widens the net of taxable income.

According to the IRS, approximately 10 million families take advantage of this tax deduction each year.  Almost all are middle class: The average taxpayer claiming this deduction earned just over $53,000 annually. ATR estimates that the average income tax increase for the average family claiming this tax benefit will be $200 - $400 per year.

3. Obamacare Medicine Cabinet Tax:  Because of Obamacare, since 2011 millions of Americans have not been able to purchase non-prescription, over-the-counter medicines using pre-tax Flexible Spending Accounts or Health Savings Accounts dollars. Examples include cold, cough, and flu medicine, menstrual cramp relief medication, allergy medicines, and dozens of other common medicine cabinet health items.

4. Obamacare Individual Mandate Non-Compliance Tax:  Anyone not buying “qualifying” health insurance – as defined by President Obama’s Department of Health and Human Services -- must pay an income surtax to the IRS. The Congressional Budget Office has estimated that six million American families will be liable for the tax, and as pointed out by the Associated Press:  “Most would be in the middle class.”

Americans liable for the tax will pay a percentage of their adjusted gross income or a set dollar figure, whichever is higher:

 

1 Adult

2 Adults

3+ Adults

2014

1% AGI/$95

1% AGI/$190

1% AGI/$285

2015

2% AGI/$325

2% AGI/$650

2% AGI/$975

2016 +

2.5% AGI/$695

2.5% AGI/$1390

2.5% AGI/$2085

5. Obamacare 10 Percent Excise Tax on Indoor Tanning:  This Obamacare tax increase has the distinction of being the first to go into effect (July 2010). Slipped into the bill by Sen. Harry Reid (D-Nev.) behind closed doors in the middle of the night, this tax hike replaced the planned Obamacare “Botax” on cosmetic surgery.  This petty, burdensome, nanny-state tax affects both the business owner and the end user.  Industry estimates from the Indoor Tanning Association show that 30 million Americans visit an indoor tanning facility in a given year, and over 50 percent of salon owners are women.  There is no exception granted for those making less than $250,000 meaning it is yet another tax that violates Obama’s “firm pledge” not to raise “any form” of tax on Americans making less than this amount.

Making matters worse: According to a Treasury Inspector General for Tax Administration report, the Obama IRS didn’t bother to issue compliance guidelines until three quarterly filing deadlines had passed:  “By the time [IRS] notices were issued, tanning excise tax returns had been due for three quarters."  This was an early warning sign that the Obama administration was ill-prepared for Obamacare implementation.

Photo credit: Barack Obama

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Obama has Proposed 442 Tax Hikes Since Taking Office

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Posted by Max Velthoven, John Kartch, Ryan Ellis on Monday, April 14th, 2014, 6:00 AM PERMALINK


Since taking office in 2009, President Barack Obama has formally proposed a total of 442 tax increases, according to an Americans for Tax Reform analysis of Obama administration budgets for fiscal years 2010 through 2015.

The 442 total proposed tax increases does not include the 20 tax increases Obama signed into law as part of Obamacare.

“History tells us what Obama was able to do. This list reminds us of what Obama wanted to do,” said Grover Norquist, president of Americans for Tax Reform.

The number of proposed tax increases per year is as follows:

-79 tax increases for FY 2010

-52 tax increases for FY 2011

-47 tax increases for FY 2012

-34 tax increases for FY 2013

-137 tax increases for FY 2014

-93 tax increases for FY 2015

Perhaps not coincidentally, the Obama budget with the lowest number of proposed tax increases was released during an election year: In February 2012, Obama released his FY 2013 budget, with “only” 34 proposed tax increases. Once safely re-elected, Obama came back with a vengeance, proposing 137 tax increases, a personal record high for the 44th President.

In addition to the 442 tax increases in his annual budget proposals, the 20 signed into law as part of Obamacare, and the massive tobacco tax hike signed into law on the sixteenth day of his presidency, Obama has made it clear he is open to other broad-based tax increases.

During an interview with Men’s Health in 2009, when asked about the idea of national tax on soda and sugary drinks, the President said, "I actually think it's an idea that we should be exploring."

During an interview with CNBC’s John Harwood in 2010, Obama said a European-style Value-Added-Tax was something that would be novel for the United States.”

Obama’s statement was consistent with a pattern of remarks made by Obama White House officials refusing to rule out a VAT.

“Presidents are judged by history based on what they did in power. But presidents can only enact laws when the Congress agrees,” said Norquist. "Thus a record forged by such compromise tells you what a president -- limited by congress -- did rather than what he wanted to do.”

The full list of proposed Obama tax increases can be found here. 

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George H.W. Bush to Receive Profile In Courage Award for Raising Taxes, Breaking “Read My Lips” Pledge

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Posted by John Kartch on Friday, March 28th, 2014, 11:23 AM PERMALINK


Because he “agreed to a tax increase as part of the compromise, and he was pilloried by conservatives for doing so,” George H.W. Bush will receive the Profile in Courage Award from the John F. Kennedy Library Foundation, it was announced Thursday. The 15-member award committee, dominated by individuals with a big government philosophy, is chaired by longtime journalist and tax increase advocate Al Hunt.

“George Herbert Walker Bush’s tax increase led to higher spending, higher taxes, and the Clinton presidency which brought even higher spending and increased taxes,” said Grover Norquist, president of Americans for Tax Reform. “The ‘compromise’ of 1990 was bad economics, bad policy, and a betrayal of the American people. Courage would have been standing up to the spending lobbyists in Washington and saying, ‘No.’ Doing what official Washington and its spending lobbies want is not courage. It is a failure of nerve.”

The 1990 “Read My Lips” Budget Deal Scam

Starting in May of 1990, President George H.W. Bush huddled with Democrat House and Senate members at Andrews Air Force Base.

  • What was Promised: Congressional Democrats convinced a number of Republicans to join them in a bipartisan deal promising $2 in spending cuts for every $1 in tax increases. President Bush signed the deal on November 5, 1990.
     
  • What Actually Happened:  Every penny of the tax increases ($137 billion from 1991-1995) went through. Not only did the Democrats break their promise to cut spending below the CBO baseline by $274 billion—they actually spent $23 billion above CBO’s pre-budget deal spending baseline. Thirty-four House Republicans broke their own Taxpayer Protection Pledges and went along with this one-sided “deal.” As a result, Republicans lost eight seats in the 1990 Congressional midterms, and President Bush only received 38% of the vote in the 1992 Presidential election.

Bush later admitted that the 1990 tax hike deal was a mistake when he was running for reelection in 1992:

“I’m very disappointed with Congress. I thought this one compromise – and it was a compromise – would result in no more tax increases. I thought it would result in total control of domestic discretionary spending. And now we see Congress talking about raising taxes again. So I’m disappointed, and given all of that, yes, a mistake.”

--March 1992

“Because he broke his word to the American people Bush lost to Clinton in 1992. Clinton then raised taxes and spending even more. Bad policy is bad politics which leads to more bad policy,” said Norquist.

Click HERE to view the press release.

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IRS Warns: Obamacare Tax Must Be Paid with Tax Return


Posted by John Kartch on Tuesday, February 25th, 2014, 6:20 PM PERMALINK


President Obama’s Internal Revenue Service today quietly released a series of Obamacare “Health Care Tax Tips” warning Americans that they must obtain “qualifying” health insurance – as defined by the federal government – or face a “shared responsibility payment” when filing their tax returns in 2015. The term “shared responsibility payment” refers to the Obamacare individual mandate tax, one of at least seven tax hikes in the healthcare law that directly hit families making less than $250,000 per year.

In “Four Tax Facts about the Health Care Law for Individuals” the agency writes:

Your 2014 tax return will ask if you had insurance coverage or qualified for an exemption.  If not, you may owe a shared responsibility payment when you file in 2015.

In “The Individual Shared Responsibility Payment- An Overview” the agency warns Americans they must prove they were covered each and every month of the year:

For any month in 2014 that you or any of your dependents don’t maintain coverage and don’t qualify for an exemption, you will need to make an individual shared responsibility payment with your 2014 tax return filed in 2015.

In “IRS Reminds Individuals of Health Care Choices for 2014”the agency details the calculations Americans can look forward to if they are liable for the tax:

If you (or any of your dependents) do not maintain coverage and do not qualify for an exemption, you will need to make an individual shared responsibility payment with your return. In general, the payment amount is either a percentage of your household income or a flat dollar amount, whichever is greater. You will owe 1/12th of the annual payment for each month you (or your dependents) do not have coverage and are not exempt. The annual payment amount for 2014 is the greater of:

  • 1 percent of your household income that is above the tax return filing threshold for your filing status, such as Married Filing Jointly or single, or
  • Your family’s flat dollar amount, which is $95 per adult and $47.50 per child, limited to a maximum of $285.

As confirmed by previous  IRS testimony to the tax-writing House Committee on Ways and Means, “taxpayers will file their tax returns reporting their health insurance coverage, and/or making a payment”.  

Once fully phased in, the Obamacare individual mandate tax will rise steeply, to a maximum of 2.5 percent of Adjusted Gross Income or $2,085 – whichever is higher.

For a pdf version of this release click here

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BREAKING: Workers Reject UAW in Stunning Defeat of Obama Ally, 712-626


Posted by John Kartch, Matt Patterson on Friday, February 14th, 2014, 4:19 PM PERMALINK


ATR’s Center for Worker Freedom (CWF) is pleased to learn that employees at Chattanooga’s Volkswagen assembly plant have resoundingly rejected the United Auto Workers and sent the left-wing union packing back to Detroit.

Executive Director Matt Patterson said in a statement:

“The workers at Volkswagen looked at the history of this union and made the best decision for themselves, their jobs and their community. In spite of the UAW’s multi-million dollar propaganda machine, and with company and government officials Obama’s NLRB aiding the union in every possible way, workers learned the facts and were able to make an informed decision.”

Patterson has worked over the past year with a coalition of local community and business leaders to help educate the citizens of Chattanooga about the UAW’s sad history of bankrupting Detroit and General Motors, as well as the union's aggressive liberal agenda, which includes millions spent on Democratic candidates and causes vastly at odds with the values of Tennessee voters.

CWF efforts included a billboard campaign across Hamilton County: 13 total, including 11 digitals rotating a variety of anti-union messages, such as "Detroit:  Brought to you by the UAW,"  pictured below:

CWF outreach efforts also included widespread radio advertising. The 30 second spot aired in both morning and evening drive times throughout election week on stations WDEF-AM News Talk, WGOW -AM News Talk, WGOW-FM News Talk, WDEF-FM AC, WSKZ-FM Rock, WUSY-FM Country, and WUUQ-FM Country.  Listen to our ad, accompanied by a slideshow of our billboard, here.

CWF contributions to this debate have been featured by the Wall Street Journal, New York Times, Politico and Bloomberg, among many others

Patterson said:

“We were proud to have contributed to this effort and to have worked with so many of our great coalition partners on the ground in Chattanooga. We look forward to taking the fight against the UAW into Alabama, Mississippi and beyond.”

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Taxpayers Shell Out $14,000 per Obamacare "Enrollee"


Posted by John Kartch on Wednesday, December 11th, 2013, 4:46 PM PERMALINK


In her testimony before Congress today, Health and Human Services Secretary Kathleen Sebelius provided an updated dollar amount for the cost of HealthCare.gov: $677 million. In addition to the $677 million spent on the federal Obamacare website, the Centers for Medicare and Medicaid Services (CMS) has shoveled $4.5 billion of taxpayer money to promote Obamacare on the state level.

HHS also released updated “enrollment” figures for Obamacare. According to the agency 364,682 people have “selected a plan” – the equivalent of putting an item in your online shopping cart and leaving it there.

That means the taxpayer cost per “enrollee” is over $14,000.

($4.5 billion + $677 million = $5,177,000,000 ÷ 364,682 = $14,196)

 

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