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John Kartch

Comprehensive List of Obamacare Tax Hikes in Order of Effective Date


Posted by John Kartch, Ryan Ellis on Friday, March 23rd, 2012, 12:02 PM PERMALINK


Two years ago this week, Obamacare was signed into law by President Obama.  This jobs-killing law will certainly wreck America’s healthcare system, but what many don’t know is that Obamacare is also one of the largest tax increases in American history.  Obamacare contains 20 new or higher taxes on American families and small businesses—seven of which fall on families making less than $250,000 per year (in direct violation of President Obama’s campaign promise). 

Below is the total list of all $500 billion-plus in tax hikes (over the next ten years) in Obamacare, where to find them in the bill, when they will take effect, and how much your taxes will go up:

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Comprehensive List of Obama Tax Increases


Posted by John Kartch, Ryan Ellis on Friday, January 20th, 2012, 11:37 AM PERMALINK


Since taking office three years ago, President Barack Obama has signed into law twenty-one new or higher taxes on the American people:

1. A 156 percent increase in the federal excise tax on tobacco:  On February 4, 2009, just sixteen days into his Administration, Obama signed into law a 156 percent increase in the federal excise tax on tobacco, a hike of 61 cents per pack.  The median income of smokers is just over $36,000 per year.

2. Obamacare Individual Mandate Excise Tax (takes effect in Jan 2014): Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax according to the higher of the following:

 

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

 

(Exemptions for religious objectors, undocumented immigrants, prisoners, those earning less than the poverty line, members of Indian tribes, and hardship cases (determined by HHS). Bill: PPACA; Page: 317-337)

3. Obamacare Employer Mandate Tax (takes effect Jan. 2014):  If an employer does not offer health coverage, and at least one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $2000 for all full-time employees.  Applies to all employers with 50 or more employees. If any employee actually receives coverage through the exchange, the penalty on the employer for that employee rises to $3000. If the employer requires a waiting period to enroll in coverage of 30-60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer). Bill: PPACA; Page: 345-346

Combined score of individual and employer mandate tax penalty: $65 billion/10 years

4. Obamacare Surtax on Investment Income (Tax hike of $123 billion/takes effect Jan. 2013):  Creation of a new, 3.8 percent 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: Bill: Reconciliation Act; Page: 87-93

 

Capital Gains

Dividends

Other*

2011-2012

15%

15%

35%

2013+ (current law)

23.8%

43.4%

43.4%

2013+ (Obama budget)

23.8%

23.8%

43.4%

 

*Other unearned income includes (for surtax purposes) gross income from interest, annuities, royalties, net rents, and passive income in partnerships and Subchapter-S corporations.  It does not include municipal bond interest or life insurance proceeds, since those do not add to gross income.  It does not include active trade or business income, fair market value sales of ownership in pass-through entities, or distributions from retirement plans.  The 3.8% surtax does not apply to non-resident aliens.

5. Obamacare Excise Tax on Comprehensive Health Insurance Plans (Tax hike of $32 bil/takes effect Jan. 2018): Starting in 2018, new 40 percent excise tax on “Cadillac” health insurance plans ($10,200 single/$27,500 family).  Higher threshold ($11,500 single/$29,450 family) for early retirees and high-risk professions.  CPI +1 percentage point indexed. Bill: PPACA; Page: 1,941-1,956

6. Obamacare Hike in Medicare Payroll Tax (Tax hike of $86.8 bil/takes effect Jan. 2013): Current law and changes:

 

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

 

Bill: PPACA, Reconciliation Act; Page: 2000-2003; 87-93

7. Obamacare Medicine Cabinet Tax (Tax hike of $5 bil/took effect Jan. 2011): Americans are no longer able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin). Bill: PPACA; Page: 1,957-1,959

8. Obamacare HSA Withdrawal Tax Hike (Tax hike of $1.4 bil/took effect Jan. 2011): Increases additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent. Bill: PPACA; Page: 1,959

9. Obamacare Flexible Spending Account Cap – aka “Special Needs Kids Tax” (Tax hike of $13 bil/takes effect Jan. 2013): Imposes cap on FSAs of $2500 (currently unlimited).  Indexed to inflation after 2013. 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 thousands of 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 educationBill: PPACA; Page: 2,388-2,389

10. Obamacare Tax on Medical Device Manufacturers (Tax hike of $20 bil/takes effect Jan. 2013): Medical device manufacturers employ 360,000 people in 6000 plants across the country. This law imposes a new 2.3% excise tax.  Exempts items retailing for <$100. Bill: PPACA; Page: 1,980-1,986

11. Obamacare "Haircut" for Medical Itemized Deduction from 7.5% to 10% of AGI (Tax hike of $15.2 bil/takes effect Jan. 2013): Currently, those facing high medical expenses are allowed a deduction for medical expenses to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI).  The new provision imposes a threshold of 10 percent of AGI. Waived for 65+ taxpayers in 2013-2016 only. Bill: PPACA; Page: 1,994-1,995

12. Obamacare Tax on Indoor Tanning Services (Tax hike of $2.7 billion/took effect July 2010): New 10 percent excise tax on Americans using indoor tanning salons. Bill: PPACA; Page: 2,397-2,399

13. Obamacare elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D (Tax hike of $4.5 bil/takes effect Jan. 2013) Bill: PPACA; Page: 1,994

14. Obamacare Blue Cross/Blue Shield Tax Hike (Tax hike of $0.4 bil/took effect Jan. 1 2010): The special tax deduction in current law for Blue Cross/Blue Shield companies would only be allowed if 85 percent or more of premium revenues are spent on clinical services. Bill: PPACA; Page: 2,004

15. Obamacare Excise Tax on Charitable Hospitals (Min$/took effect immediately): $50,000 per hospital if they fail to meet new "community health assessment needs," "financial assistance," and "billing and collection" rules set by HHS. Bill: PPACA; Page: 1,961-1,971

16. Obamacare Tax on Innovator Drug Companies (Tax hike of $22.2 bil/took effect Jan. 2010): $2.3 billion annual tax on the industry imposed relative to share of sales made that year. Bill: PPACA; Page: 1,971-1,980

17. Obamacare Tax on Health Insurers (Tax hike of $60.1 bil/takes effect Jan. 2014): Annual tax on the industry imposed relative to health insurance premiums collected that year.  Phases in gradually until 2018.  Fully-imposed on firms with $50 million in profits. Bill: PPACA; Page: 1,986-1,993

18. Obamacare $500,000 Annual Executive Compensation Limit for Health Insurance Executives (Tax hike of $0.6 bil/takes effect Jan 2013). Bill: PPACA; Page: 1,995-2,000

19. Obamacare Employer Reporting of Insurance on W-2 ($min/takes effect Jan. 2012): Preamble to taxing health benefits on individual tax returns. Bill: PPACA; Page: 1,957

20. Obamacare “Black liquor” tax hike (Tax hike of $23.6 billion/took effect immediately).  This is a tax increase on a type of bio-fuel. Bill: Reconciliation Act; Page: 105

21. Obamacare Codification of the “economic substance doctrine” (Tax hike of $4.5 billion/took effect immediately).  This provision allows the IRS to disallow completely-legal tax deductions and other legal tax-minimizing plans just because the IRS deems that the action lacks “substance” and is merely intended to reduce taxes owed. Bill: Reconciliation Act; Page: 108-113

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"Patriotic Millionaires" Meet with Grover Norquist


Posted by John Kartch on Wednesday, November 16th, 2011, 6:40 PM PERMALINK


Today, the “Patriotic Millionaires for Fiscal Strength” visited with Americans for Tax Reform president Grover Norquist to make their case for higher taxes. The group approached ATR with the request last week.

On their website, the Millionaires write: “Please do the right thing for our country. Raise our taxes.”

Norquist pointed out to the group that if they want to pay higher taxes they have several options:

They can cut a check directly to the U.S. Treasury. Any citizen may make a donation today simply by writing a check to the Treasury, to a fund called “Gifts to the United States.” In September, Norquist wrote a letter to Warren Buffett pointing out this fact.

They can cut a check to one of the state “Tax Me More” funds. There are at least eight states that have established Tax Me More funds to allow those who feel they are not paying enough in taxes to contribute to the state treasury.

They can support the “Buffett Rule Act of 2011.” ATR supports this bill which would instruct the IRS to provide a prominent, convenient checkbox line on 1040 forms to allow those so inclined to pay extra income tax. In the House, the bill (H.R. 3099) is being championed by Congressman Steve Scalise (R-La.), and in the Senate (S. 1676) by John Thune (R-S.D.)

ATR also pointed out that the tax code is already steeply progressive, with the top 1% of income earners paying 40% of all income taxes while the bottom half pay just 3% of all income taxes.

Handed to the Millionaires was a copy of Maimonides’ Eight Levels of Charity. A ninth level was added by ATR in good humor, called The Warren Buffett Level: “Not anticipated by Maimonides and lower than all the others, this is when someone doesn’t actually make a charitable contribution but parades around saying he would if he was forced to after everyone else was forced to.” 

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Boehner Makes It Clear: We're Not Raising Taxes


Posted by John Kartch on Thursday, November 3rd, 2011, 2:31 PM PERMALINK


During a press conference today, House Speaker John Boehner explained why House Republicans will not be voting for a net tax increase:

BOEHNER:  “Listen: Our conference is opposed to tax hikes because we believe that tax hikes will hurt our economy and put Americans out of work.”

 

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Reminder: Simpson-Bowles is a $1 Trillion to $3 Trillion Tax Hike


Posted by John Kartch on Tuesday, November 1st, 2011, 11:29 AM PERMALINK


Alan Simpson and Erskine Bowles, Co-Chairmen of President Obama’s debt commission, will testify before the Congressional “Supercommittee” this afternoon.  Taxpayers should be reminded that the Simpson-Bowles plan is a net tax increase of $1 trillion, $2 trillion, or $3 trillion over a decade:

  • Even the internal score of Simpson-Bowles admits the plan raises taxes by over $1 trillion.
     
  • House Budget Committee Chairman Paul Ryan, who voted against Simpson-Bowles, writes:

“Relative to a current policy baseline, the proposal would increase revenues by $2 trillion over 10 years.”  [“Expanded Views on the Fiscal Commission,” by Paul Ryan, Dec. 4, 2010]

  • The Heritage Foundation scored Simpson-Bowles as a $3.3 trillion tax increase over ten years:

“Overall, the fiscal commission would raise taxes by $3.3 trillion over the decade.”  Heritage also wrote that Bowles-Simpson would be “the highest sustained tax burden in American history.” [“Fiscal Commission Report: Too Much Taxes, Not Enough Spending Cuts,” by Brian Riedl, Dec. 3, 2010]

 

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Appropriator Frank Wolf Borrows Obama/DCCC Playbook to Craft Lies About Tax Pledge


Posted by John Kartch on Tuesday, October 4th, 2011, 6:40 PM PERMALINK


Rep. Frank Wolf (R-Va.) today borrowed a page from the campaign playbook of President Obama and the Democratic Congressional Campaign Committee.  Wolf, a member of the Appropriations Committee and one of only six Republican members of the U.S. House who has failed to sign the Taxpayer Protection Pledge to his constituents, submitted the following to the Congressional Record:

Rep. Wolf said:  “On the Republican side, Grover Norquist holds up the Americans for Tax Reform’s Taxpayer Protection Pledge to block even the mention of putting tax reform on the table for discussion as part of a deficit reduction agreement.”

Many recent unsuccessful Democrat congressional candidates, as well as President Obama, have trotted out similar claims deemed “blatantly false” by the nonpartisan FactCheck.org.

As FactCheck.org has noted:

“[The Pledge] leaves ample room for elimination of any number of special tax breaks so long as the overall level of taxation is not increased. To claim that this ‘protects’ any particular provision of the tax code is simply untrue.”

ATR has offered the Pledge to all candidates for federal office since 1987. In the 112th Congress, 41 U.S. Senators and 238 members of the U.S. House of Representatives have signed the Pledge. Additionally, thirteen governors and over 1,200 state legislators have signed the Pledge.

 

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Frank Wolf Admits He Supports Trillions in Tax Hikes


Posted by John Kartch on Tuesday, October 4th, 2011, 4:47 PM PERMALINK


Rep. Frank Wolf (R-Va.) is one of only six Republican members of the U.S. House who has failed to sign the Taxpayer Protection Pledge to his constituents.  In his remarks submitted to the Congressional Record today, Wolf confirmed that he supports the recommendations of President Obama’s Bowles-Simpson commission, a net tax increase of $1-3 trillion over ten years.  According to Wolf’s statement:

“I have supported every serious effort to resolve this crisis: the Bowles-Simpson recommendations, the “Gang of Six” effort, and the “Cut, Cap and Balance” bill – including the Balanced Budget Amendment.  None of these solutions were perfect, but they all took the steps necessary to rebuild and protect our economy.”

House Budget Committee Chairman Paul Ryan, who voted against Bowles-Simpson, writes:

“Relative to a current policy baseline, the proposal would increase revenues by $2 trillion over 10 years.”  [“Expanded Views on the Fiscal Commission,” by Paul Ryan, Dec. 4, 2010]

The Heritage Foundation scored Bowles-Simpson as a $3.3 trillion tax increase over ten years:

Overall, the fiscal commission would raise taxes by $3.3 trillion over the decade.”  Heritage also wrote that Bowles-Simpson would be “the highest sustained tax burden in American history.” [“Fiscal Commission Report: Too Much Taxes, Not Enough Spending Cuts,” by Brian Riedl, Dec. 3, 2010]

 

 

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Grover Norquist Letter to Warren Buffett: I Have Solved Your Problem


Posted by John Kartch on Wednesday, September 28th, 2011, 12:03 AM PERMALINK


Americans for Tax Reform president Grover Norquist today sent the following letter to Warren Buffett: 

Dear Warren:

I have solved your problem.

You have mentioned in passing that you feel unhappy that you do not pay enough money to the government each year in taxes.

As it turns out, you don’t need to wait for President Obama to sign legislation raising taxes on you. You can open up your checkbook right now, write a check payable to the United States Treasury, and drop it in the nearest mailbox (or just hand it to your “secretary”). Problem solved.

Here are the details below, taken directly from the U.S. Department of the Treasury website: 

http://www.fms.treas.gov/faq/moretopics_gifts.html

How do I make a contribution to the U.S. government?
Citizens who wish to make a general donation to the U.S. government may send contributions to a specific account called "Gifts to the United States." This account was established in 1843 to accept gifts, such as bequests, from individuals wishing to express their patriotism to the United States. Money deposited into this account is for general use by the federal government and can be available for budget needs. These contributions are considered an unconditional gift to the government. Financial gifts can be made by check or money order payable to the United States Treasury and mailed to the address below. 

Gifts to the United States
U.S. Department of the Treasury
Credit Accounting Branch
3700 East-West Highway, Room 622D
Hyattsville, MD 20782  

Once you’ve sent the check, I would be glad to help spread the word. The many others who believe the government can spend their money better than they can will be inspired by your example.

As a convenience to you, I’ve enclosed an envelope pre-addressed to the U.S. Treasury.  You’ll have to take care of the stamp yourself, however.  

Onward,

Grover Norquist



 

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Obama Should Apologize for Lying About Taxpayer Protection Pledge


Posted by John Kartch on Monday, September 19th, 2011, 4:47 PM PERMALINK


Americans for Tax Reform today called on President Obama to apologize to members of Congress and all Americans for his false statements about the Taxpayer Protection Pledge during his tax-hike speech in the Rose Garden this morning. Obama said:

“It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million.  Anybody who says we can’t change the tax code to correct that, anyone who has signed some pledge to protect every single tax loophole so long as they live, they should be called out.”

Obama’s political attack is straight out of the DCCC playbook:  Many recent unsuccessful Democrat congressional candidates have trotted out similar claims deemed “blatantly false” by the nonpartisan FactCheck.org.

As FactCheck.org has noted:

[The Pledge] leaves ample room for elimination of any number of special tax breaks so long as the overall level of taxation is not increased. To claim that this "protects" any particular provision of the tax code is simply untrue.

In response to President Obama’s comments, Grover Norquist, president of Americans for Tax Reform, said:  “Had President Obama actually read the Pledge, he would know that the Pledge is a commitment by Congressmen to the American people that they will oppose any and all net tax increases.  Many Pledge-signers join Americans for Tax Reform in working for revenue-neutral tax reform: a simpler tax code with lower rates.  Americans support tax reform, not a tax increase.  Today President Obama vowed to veto real tax reform and said he would only sign legislation that raised taxes significantly.”

ATR has offered the Pledge to all candidates for federal office since 1987. To date, 41 U.S. Senators and 238 members of the U.S. House of Representatives have signed the Pledge. Additionally, thirteen governors and over 1,200 state legislators have signed the Pledge.

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White House Signals New Push for Value-Added Tax?


Posted by John Kartch on Tuesday, August 30th, 2011, 11:49 AM PERMALINK


Although the imposition of a value-added tax (VAT) would violate President Barack Obama’s central campaign promise – a “firm pledge” that no family making less than $250,000 per year would see “any form of tax increase” – he continues to surround himself with those sympathetic to the tax.

President Obama, who in April 2010 deemed a VAT “something that would be novel for the United States”, announced on Monday his intention to nominate Princeton University’s Alan B. Krueger to head the Council of Economic Advisors.  In a 2009 blog post for the New York Times, Krueger wrote:

“Why not pass a 5 percent consumption tax to take effect two years from now?”

Even when pressed, the Obama White House has never ruled out a VAT.  As the timeline below illustrates, those in and around the White House have been flirting with a VAT from the earliest days:

December 18, 2008:  The Obama transition team announces VAT advocate Ezekiel Emanuel’s appointment as special advisor for healthcare at the Office of Management and Budget.  Emanuel had long pushed for a VAT as a way to pay for government-funded universal healthcare. (See here, here, and here.)

Sept. 25, 2009:  John Podesta, former head of Obama’s transition team, floats the VAT on Bloomberg Television’s “Political Capital with Al Hunt”:

“There’s going to have to be revenue in this budget,” said Podesta,

A so-called consumption tax would “create a balance” with European and Japanese economies and “could potentially have a substantial effect on competitiveness,” said Podesta.

Podesta said such a tax may be regressive, but can be balanced by exempting some products and using “the money to support low-wage workers.”   

Sept. 29, 2009:  Obama advisor Paul Volcker suggests a carbon tax and a VAT as a way to raise large amounts of revenue.

"Those are the two big ones.  I'd love to see the expenditures held in check so we don't have to do that." 

Sept. 30, 2009:  The Center for American Progress—a group with close White House ties—releases a draft report encouraging the Obama Administration to consider a VAT.  The report concludes:

"In all seriousness, responsible people know that additional revenue has to be part of the mix even if they believe in lower taxes in general.” 

The White House did not respond to a Wall Street Journal reporter’s requests for comment about the proposal.

Feb. 19, 2010:  During a Bloomberg interview, Erskine Bowles, co-chairman of Obama’s debt commission, said:

“A value-added tax -- I’ve looked at lots of them -- ought to be something that’s on the table.”

April 6, 2010:  Speaking at a New York Historical Society event, Obama advisor Paul Volcker said a VAT is “not as toxic an idea” as it has been in the past and concluded:

"If at the end of the day we need to raise taxes, we should raise taxes." 

April 19, 2010:  The New York Times reports that the White House economic team has been calculating government revenues from a possible VAT:

But since any Social Security plan would probably preserve benefits for those nearing retirement, it would not help the administration achieve its goal of reducing the deficit to 3 percent of gross domestic product, from 10 percent, within a decade.

One way to reach that 3 percent goal, by the calculations of Mr. Obama’s economic team: a 5 percent value-added tax, which would generate enough revenue to simultaneously permit the reduction in corporate tax rates Republicans favor.

April 20, 2010:  On MSNBC’s Morning Joe, White House economic advisor Austan Goolsbee refuses six consecutive opportunities to permanently close the door on a VAT: 

MARK HALPERIN:  Will the President ever consider tax reform that will involve a VAT?  Would he ever consider it?

(Refusal #1)  GOOLSBEE:  Look, we are not, the report -- and I’m not sure where it came from cause it’s not anything I saw -- was that they were contemplating a VAT, that is not true.  We have stood up this bipartisan fiscal commission, which as I understand it is considering a whole bunch of things.

HALPERIN:  But would he ever consider.

(Refusal #2) GOOLSBEE:  He’s going to consider whatever comes out of that fiscal commission.

HALPERIN:  So if they recommend a VAT, he would consider it?

(Refusal #3) GOOLSBEE:  I’m not going to get into a linguistic game about it. 

HALPERIN:  Well it’s not a linguistic game. 

(Refusal #4) GOOLSBEE:  He’s looking to see what comes out of the fiscal commission.  He’s going to look at it.

HALPERIN: We had a President for eight years who said ‘no new taxes, we’re not going to raise taxes’.  This President said ‘no taxes on the middle class’.  Arguably there are taxes in the healthcare bill that will hit the middle class.  So again, a VAT would be a big change in America.  Would he consider it, if the commission recommends it, would he consider it?

(Refusal #5) GOOLSBEE:  As you know, the President cut taxes for 95 percent of the workers in the stimulus.  Many many billions of dollars.  The President is committed to this bipartisan fiscal commission process and he’s going to seriously consider all the things that they put forward and he’s going to look at them.  It doesn’t mean he’s supporting a VAT.  We haven’t even contemplated a VAT.

HALPERIN:  But if they recommend it, it’s not something he’d rule out?

(Refusal #6) GOOLSBEE: I’m not going to get into a hypothetical thing about it.  He’s committed to a bipartisan fiscal commission. 

April 21, 2010:  President Obama makes it official:  He is open to the imposition of a VAT on the American people.  Obama’s admission came during an interview with CNBC’s John Harwood.  Asked if he could see the potential for a VAT, the President said:

"I know that there's been a lot of talk around town lately about the value-added tax. That is something that has worked for some countries. It's something that would be novel for the United States.  And before, you know, I start saying 'this makes sense or that makes sense,' I want to get a better picture of what our options are.”

August 29, 2011:  Obama announces his intention to appoint Alan Krueger to head the Council of Economic Advisors.  In a 2009 New York Times blog post, Krueger wrote:

“Why not pass a 5 percent consumption tax to take effect two years from now?”

 

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