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John Kartch

In Push for Internet Sales Tax, NGA Accuses its Chairman of Presiding Over a "Tax Haven"


Posted by John Kartch on Friday, April 26th, 2013, 10:53 AM PERMALINK


In today’s Wall Street Journal, National Governors Association (NGA) executive director Dan Crippen contemptuously tarred as “tax havens” the five U.S. states that choose not to levy a sales tax upon their citizens. One of the five states with no sales tax is none other than Delaware, the state run by the current NGA chairman, Governor Jack Markell (D).

“The genius of America is to have the fifty states compete to provide the best government at the lowest cost,” said Grover Norquist, president of Americans for Tax Reform. “The NGA is fighting to establish a cartel in order to avoid competition which would lead to better, less expensive government.”

In their Wall Street Journal opinion piece, the NGA denied the Marketplace Fairness Act was being rammed through the Senate and falsely claimed online sales tax opponents were merely “attempting to preserve the sales-tax havens of a few states.” In so doing, the NGA revealed its scorn toward low-tax states and especially the five states with no sales tax.  Four of the five are governed by Democrats, and all five are members of the NGA:

Delaware – Gov. Jack Markell (D)

Montana – Gov. Steve Bullock (D)

New Hampshire – Gov. Maggie Hassan (D)

Oregon – Gov. John Kitzhaber (D)

Alaska – Gov. Sean Parnell (R)

So the NGA accepts “tax havens” as members.  And the NGA has no problem publicly defaming states whose taxpayers foot the bill for its 89-person staff, who spend their days pushing ever-higher taxes.

“The NGA staff does not represent the fifty states. Every time, the NGA staff sides with the high tax states against the low-tax states,” said Norquist.

Internet sales tax legislation pushed by the NGA passed cloture Thursday in the U.S. Senate by a vote of 63-30. This most recent vote to tax e-commerce represents a significant drop in Senate support for the measure in just 24 hours. On Wednesday, the vote was 75-22.

Taxpayers can visit www.TaxesWithoutBorders.com to encourage their Congressman and Senators to vote against the Marketplace Fairness Act.

View PDF here.

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Norquist on Marketplace Fairness Act: Tremendous abuses would flow from politicians


Posted by John Kartch on Thursday, April 25th, 2013, 12:32 PM PERMALINK


Americans for Tax Reform president Grover Norquist appeared today on Fox Business Network’s Varney & Co. to discuss the Marketplace “Fairness” Act.

Excerpts are below:

“Do you really believe there is a limit to the amount of abuse an Alabama tax collector can hurl on a New York or California or Maine business?”

--

“There are tremendous abuses that would flow from politicians taxing businesses that can't even vote against them.  That’s why the politicians at the state level love this! It’s ‘free money!’ they think.  But by opening it up, the voters in their states will get mugged by 49 tax collectors in the other states.”

            --

“This is all about raising money to pay unionized state and local government workers more money and more pensions because they don't think making $20,000 more than people in the private sector is enough, having gold-plated pensions is not enough.  They want more. They think this is the only way they can get certain states to raise money for them.”

--

“We need to first put into any bill that is being discussed a prohibition on having this process extended to income taxes and corporate income taxes.  Because what the union bosses want is not the sales taxes, there is no money there.  They maybe think, you know, $8 billion they could raise in a year off Internet sales taxes, that doesn’t get them through the week, okay.  What they want is to tax Exxon’s worldwide earnings out of Mississippi, out of North Dakota.  This is to extend corporate income taxes.”

--

“Loser states -- Illinois and California -- that are losing people are trying to figure out how to tax people that are leaving.”

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White House confirms: Obama Budget Contains Middle Class Income Tax Hike


Posted by John Kartch, Ryan Ellis on Tuesday, April 9th, 2013, 9:49 AM PERMALINK


The White House has confirmed that President Obama’s forthcoming budget contains an income tax increase on middle class Americans.

During a Friday, April 5 White House press briefing, spokesman Jay Carney replied “I’m not disputing that” when asked if a particular Obama budget proposal would raise income taxes on the middle class.

The proposal in question is known as “Chained CPI.” The term is a Beltway euphemism for measuring inflation at a different, slower pace.  Many tax and budget items are indexed to inflation, so slowing inflation’s measured rate of growth has both spending cut and tax increase implications.

On the tax side, all income tax brackets are subject to inflation.  Slowing down the inflation rate slows down the annual rate of growth in all income tax brackets.

This means the Obama budget contains a tax increase on 100 percent of middle class taxpayers—anyone who pays the federal income tax.

Many other tax provisions—the standard deduction, the personal exemption, PEP and Pease, IRA and 401(k) contribution limits, and many others—are also tied to how CPI is measured.

Chained CPI as a stand-alone measure (that is, not paired with tax relief of equal or greater size) is a tax increase and a Taxpayer Protection Pledge violation. Various reports peg the tax increase amount as exceeding $100 billion over the next decade.

Video of the press briefing exchange can be found here.

The transcript from the exchange is as follows:

MAJOR GARRETT, CBS NEWS/NATIONAL JOURNAL:  “A follow-up on Jim’s question -- you do not and the White House does not dispute that if the chained CPI were put in -- to be put into effect, it would raise taxes on middle-income Americans?”

JAY CARNEY:  The chained CPI, which is a technical adjustment to how we measure the consumer price index --

GARRETT:  But its practical effect would be --

CARNEY:  Again --

GARRETT:  -- to raise taxes on --

MR. CARNEY:  I’m not disputing that, but I’m saying that it is not the President’s ideal policy.  It is in a letter from the Senate Minority Leader requesting that it be part of a negotiation deal.

GARRETT:  All right, I'm just saying you don’t disagree, that those things happen?

CARNEY:  Right, but Major, and --

GARRETT:  -- a tax increase?

CARNEY:  -- let’s be clear, as we’ve said all along, that the offer was on the table.  The President made that offer because he was hopeful that we would see commensurate willingness to compromise from Republicans.  Unfortunately, we haven’t seen that.

The President is engaged in conversations with Republicans in the Senate in particular but also in the House in an effort to find common ground, to see if there is a willingness to embrace the idea that we can reduce our deficits in a balanced way and continue to invest in our economy and middle-class families.  And if there is, then we’ll be able to get something done.

GARRETT:  And to critics who would say to this President, looking at this proposal, this is the last and possibly worst time -- from their point of view -- to raise taxes on the middle class, inflict benefit cuts on elderly on fixed incomes, even in the pursuit of deficit reduction, the President would say what?

CARNEY:  The President would say that as part of a balanced approach that asks the wealthy and well-to-do and well-connected to contribute their fair share through tax reform, elimination of special tax breaks that average folks don’t get, that we can also include entitlement reforms that allow us to achieve deficit reduction in a balanced way and allow us to continue to invest in our economy in ways that will help it grow and create jobs.

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ATR Releases 2013 State of the Union Bingo!


Posted by John Kartch on Monday, February 11th, 2013, 5:20 PM PERMALINK


Americans for Tax Reform is taking its annual State of the Union Bingo game to Facebook. Viewers can play along during the speech by visiting www.atr.org/bingo

-- Players can access a customized bingo card on the full Facebook site, mobile site, and Facebook smart phone and tablet apps. 

--Each player is given one free space designated as the “Gov’t Subsidized ‘Free’ Space.”

--During the State of the Union, players will follow along as words are called out in the “Last Box Called” area. Users must identify the word in the allotted time.

--If a player or players has all the words covered diagonally, across a row or vertically in a column, they should click the “Call BINGO!” button.

Bingo terms and translation key:

"Investment" – Taxpayer-funded giveaways to union bosses and big-city political machines.

"Children and grandchildren" – The people picking up the tab.

"Energy" – What the Obama administration expends to ensure the Keystone XL Pipeline is never built.

"I" or "Me" – Center of the known universe.

"Compromise" – Tax hikes.

"Sacrifice" – Tax hikes.

"Fair" OR "Fair Share" – Tax hikes.

"Balanced" – Tax hikes.

“My fellow Americans” – Tax hikes.

“Special Interests” – Thank you for not asking about Solyndra.

"Small business" – Those whose tax rate just went up from 35% to 43.4% thanks to Obamacare and the fiscal cliff.

"There are those who..." OR "Some" – [INSERT STRAW MAN HERE]

"Middle class" – Those who are the target of seven tax hikes in Obamacare.

"Deficit" – The product of an overspending problem which Democrats want to “fix” with tax hikes.

"Regulations" – Things you write during your first four years and make public only after you are safely re-elected.

"Infrastructure" OR "Roads and Bridges" – High-speed “bullet trains” to nowhere.

"Affordable" – Affordable only after a taxpayer-funded subsidy. But not really.

"Obstructionists" –1. NOT the Senate Democrats who have refused to pass a budget for four years. 2. Nor the same Senate Dems who have unanimously voted down the Obama budget.

“Loopholes”- Tax preference items forced into the fiscal cliff bill at the insistence of the Obama administration.

"Jobs" – Where young adults used to spend their time instead of Mom and Dad’s basement.

“Millionaires and Billionaires” -- Taxpayers making far less than this amount (i.e. $250,000).

“Gun safety” – Gun control.

"Recovery" – This term I’m serious. I swear.

View PDF here.

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$1 Trillion Obamacare Tax Hike Hitting on Jan. 1


Posted by John Kartch on Friday, December 28th, 2012, 5:10 PM PERMALINK


Obamacare contains twenty new or higher taxes. Five of the taxes hit for the first time on January 1.  In total, Americans face a net $1 trillion tax hike for the years 2013-2022, according to the Congressional Budget Office.

The five major Obamacare taxes taking effect on January 1 are as follows:

The Obamacare Medical Device Tax:  Medical device manufacturers employ 409,000 people in 12,000 plants across the country. Obamacare imposes a new 2.3 percent excise tax on gross sales – even if the company does not earn a profit in a given year.  In addition to killing small business jobs and impacting research and development budgets, this will increase the cost of your health care – making everything from pacemakers to artificial hips more expensive.

The Obamacare Flex 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 will face a new government cap of $2500. This will squeeze $13 billion of tax money from Americans over the next ten years. (Currently, the accounts are unlimited under federal law, though employers are allowed to set a cap.)

There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children.  There are several million families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. This Obamacare tax provision will limit the options available to these families.

The Obamacare Surtax on Investment Income: This is a new, 3.8 percentage point surtax on investment income earned in households making at least $250,000 ($200,000 single).  This would result in the following top tax rates on investment income:

 

Capital Gains

Dividends

Other*

2012

15%

15%

35%

2013+ (current law)

23.8%

43.4%

43.4%

The table above also incorporates the scheduled hike in the capital gains rate from 15 to 20 percent, and the scheduled hike in dividends rate from 15 to 39.6 percent.

The Obamacare “Haircut” for Medical Itemized Deductions: Currently, those Americans facing high medical expenses are allowed a deduction to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI).  This tax increase imposes a threshold of 10 percent of AGI. By limiting this deduction, Obamacare widens the net of taxable income for the sickest Americans.  This tax provision will most harm near retirees and those with modest incomes but high medical bills.

The Obamacare Medicare Payroll Tax Hike:  The Medicare payroll tax is currently 2.9 percent on all wages and self-employment profits.  Under this tax hike, wages and profits exceeding $200,000 ($250,000 in the case of married couples) will face a 3.8 percent rate instead. This is a direct marginal income tax hike on small business owners, who are liable for self-employment tax in most cases. The table below compares current law vs. the Obamacare Medicare Payroll Tax Hike:

 

First $200,000
($250,000 Married)
Employer/Employee

All Remaining Wages
Employer/Employee

Current Law

1.45%/1.45%
2.9% self-employed

1.45%/1.45%
2.9% self-employed

Obamacare Tax Hike

1.45%/1.45%
2.9% self-employed

1.45%/2.35%
3.8% self-employed

Follow the author on Twitter: @JohnKartch

 Click here for a PDF of this document

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"Uh, No."


Posted by John Kartch on Friday, December 14th, 2012, 1:33 PM PERMALINK


President Barack Obama did an interview with Minneapolis-based television station WCCO on Thursday night. Anchor Frank Vascellaro asked about the job-killing Obamacare medical device tax, and the recent letter signed by 18 Democrat senators and senators-elect requesting a delay in the implementation of the tax (after they voted for it in the first place).

The key exchange is as follows:

Frank Vascellaro, WCCO TV:  “Senators Klobuchar and Franken are trying to delay and actually repeal part of the medical devices tax, which has a huge impact on Minnesota companies. Would you be willing to see that delayed?”

President Obama: “Uh, no. And here’s why. The health care bill is going to provide those health care companies, 30 million new customers. It’s going to be great for business and they’re doing really well right now and they’re going to get 30 million more customers as a consequence, so this additional tax essentially comes back to them as new customers. I think it’s very important for us to maintain the principal that A.) nobody should go bankrupt when they get sick in this country and B.) the providers of medical services should recognize they’re going to get a benefit from all of these uninsured folks suddenly having insurance and that means they should be willing to do a little bit in order to make that happen. It’s not just medical device folks, hospitals are doing a little bit more because they know now they’re not going to have uncompensated care in emergency rooms, everybody’s going to have some kind of insurance. Doctors, same kind of thing. So this is not unique to the medical device industry. The idea is that when you have 30 million more people coming in, you’re going to make money, you can do a little more to help facilitate and make sure people are getting the health care they need.”

As if this rationale wasn’t bad enough on its own, it doesn’t even hold water. As Senate Finance Committee ranking member Orrin Hatch has pointed out, “Justification for the tax falls short.”:

"Matthew Dolan, a senior research analyst at Roth Capital Partners, said he discounts the argument made by supporters of the medical device tax that it is a payback for the windfall the companies would reap when 30 million new customers gain access to health care plans through the Affordable Care Act.

Dolan said similar claims were made when Massachusetts adopted its own universal health care plan, but in fact sales of medical devices in the Bay State grew more slowly than rest of the country.

Click here for the PDF version of this document

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Documentation of President Obama's Middle Class Tax Pledge


Posted by John Kartch on Wednesday, December 12th, 2012, 6:49 PM PERMALINK


Speaking in Dover, New Hampshire on Sept. 12, 2008, candidate Obama said:

“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]

During a nationally televised Vice-Presidential debate in St. Louis on Oct. 3, 2008, 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]

In an address to a joint session of Congress on Feb. 24, 2009, 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]

During a White House press briefing on April 15, 2009, 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]

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Dems Ask for Delay to Obamacare Med Device Tax They Voted for in the First Place


Posted by John Kartch on Tuesday, December 11th, 2012, 2:50 PM PERMALINK


In a letter to Majority Leader Harry Reid, 18 Democrat senators and senators-elect have asked for “a delay in the implementation” of the Obamacare medical device tax.  Like most of the significant tax increases in Obamacare, the medical device tax is scheduled to take effect on Jan. 1, 2013, conveniently after the 2012 presidential election.

Each of the 18 Democrat signatories voted for or supported Obamacare in the first place.  And now they want a sweetheart exemption from one of its most onerous provisions. Even in Washington DC, that shows a lot of gall. 

The signatories to the letter are as follows:

Amy Klobuchar (D-Minn.)

Kay Hagan (D-N.C.)

Al Franken (D-Minn.)

Herb Kohl (D-Wis.)

Barbara Mikulski (D-Md.)

John Kerry (D-Mass.)

Charles Schumer (D-N.Y.)

Kirsten Gillibrand (D-N.Y.)

Robert Casey (D-Pa.)

Ben Nelson (D-Neb.)

Debbie Stabenow (D-Mich.)

Jeanne Shaheen (D-N.H.)

Dick Durbin (D-Ill.)

Joseph Lieberman (I-Conn.)

Patty Murray (D-Wash.)

Elizabeth Warren (D-Mass.)

Richard Blumenthal (D-Conn.)

Joe Donnelly (D-Ind.) – (Voted for Obamacare in the House)

View PDF here.

 

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The Fiscal Cliff's Hidden $1 Trillion Tax Hike


Posted by John Kartch, Ryan Ellis on Thursday, December 6th, 2012, 1:36 PM PERMALINK


According to the Congressional Budget Office (CBO), Obamacare’s twenty new or higher taxes amount to a net $1 trillion over the next decade, 2013-2022.

These tax increases are already permanent law due to Obamacare.  They include the medical device tax, the surtax on investment income, the individual and employer mandate non-compliance penalty tax, the medical itemized deduction “haircut,” the hike in the Medicare payroll tax rate, and others. These tax increases total exactly $1 trillion over the next ten years:

2012 CBO Report on Revenue Effects of Obamacare

Tax Hike Provisions

Tax Hike
2013-2022

Tax Penalty Payments by Uninsured Individuals

$55 billion

Tax Penalty Payments by Employers

$106 billion

Excise Tax on High-Premium Insurance Plans

$111 billion

Associated Effects of Coverage Provisions
on Tax Revenues

$216 billion

Reinsurance and Risk Adjustment Collections

$184 billion

Fees on Manufacturers and Insurers

$165 billion

Additional Hospital Insurance Tax

$318 billion

Other Revenue Provisions

$87 billion

Tax Cut Provisions

 Tax Cut
2013-2022

Exchange Premium Tax Credits

($222 billion)

Small Employer Tax Credits

($20 billion)

Obamacare Total Net Tax Increase 2013-2022

$1 trillion

 
 

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Regardless of Fiscal Cliff: Five More Obamacare Taxes Hitting on January 1


Posted by John Kartch on Wednesday, November 28th, 2012, 7:34 AM PERMALINK


The Obamacare Medical Device Tax – a $20 billion tax increase:  Medical device manufacturers employ 409,000 people in 12,000 plants across the country. Obamacare imposes a new 2.3 percent excise tax on gross sales – even if the company does not earn a profit in a given year.  In addition to killing small business jobs and impacting research and development budgets, this will increase the cost of your health care – making everything from pacemakers to prosthetics more expensive.

The Obamacare “Special Needs Kids Tax” – a $13 billion tax increase:  The 30-35 million Americans who use a Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs will face a new government cap of $2,500 (currently the accounts are unlimited under federal law, though employers are allowed to set a cap). 

There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children.  There are several million families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. This Obamacare tax provision will limit the options available to these families.

The Obamacare Surtax on Investment Income – a $123 billion tax increase:  This is a new, 3.8 percentage point surtax on investment income earned in households making at least $250,000 ($200,000 single).  This would result in the following top tax rates on investment income:

 

Capital Gains

Dividends

Other*

2012

15%

15%

35%

2013+ (current law)

23.8%

43.4%

43.4%

The table above also incorporates the scheduled hike in the capital gains rate from 15 to 20 percent, and the scheduled hike in dividends rate from 15 to 39.6 percent.

The Obamacare “Haircut” for Medical Itemized Deductions – a $15.2 billion tax increase: Currently, those Americans facing high medical expenses are allowed a deduction to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI).  This tax increase imposes a threshold of 10 percent of AGI. By limiting this deduction, Obamacare widens the net of taxable income for the sickest Americans.  This tax provision will most harm near retirees and those with modest incomes but high medical bills.

The Obamacare Medicare Payroll Tax Hike -- an $86.8 billion tax increase:  The Medicare payroll tax is currently 2.9 percent on all wages and self-employment profits.  Under this tax hike, wages and profits exceeding $200,000 ($250,000 in the case of married couples) will face a 3.8 percent rate instead. This is a direct marginal income tax hike on small business owners, who are liable for self-employment tax in most cases. The table below compares current law vs. the Obamacare Medicare Payroll Tax Hike:

 

First $200,000
($250,000 Married)
Employer/Employee

All Remaining Wages
Employer/Employee

Current Law

1.45%/1.45%
2.9% self-employed

1.45%/1.45%
2.9% self-employed

Obamacare Tax Hike

1.45%/1.45%
2.9% self-employed

1.45%/2.35%
3.8% self-employed

 

View PDF here.

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