THE INTERNET TAX MORATORIUM EXPIRATION

COUNTDOWN

Tell the Senate
to Make the
Moratorium
Permanent.
Click Here to Sign the Petition Before It's Too Late.
00
DAYS
00
HOURS
00
MINUTES
00
SECONDS

Ryan Ellis

How Many Jobs Might Obamacare Cost Your State?


Posted by Ryan Ellis on Wednesday, February 5th, 2014, 11:14 AM PERMALINK


On Monday, the Congressional Budget Office (CBO) issued a report which shows that Obamacare will cost the economy the equivalent of 2.5 million jobs by 2024.  That's a lot of lost hours and paychecks, but we thought it would be interesting to extrapolate this number by state.  The Bureau of Labor Statistics tells us what percentage of all jobs each state has, so it's a simple matter to figure out how many jobs Obamacare might cost each state.  Here's the results:

State

Jobs

Alabama

            34,444

Alaska

             6,055

Arizona

            46,127

Arkansas

            21,695

California

          268,441

Colorado

            43,257

Connecticut

            30,015

Delaware

              7,827

District of Columbia

            13,313

Florida

          138,967

Georgia

            74,133

Hawaii

            11,290

Idaho

           11,586

Illinois

          106,067

Indiana

            54,087

Iowa

            27,784

Kansas

            25,010

Kentucky

            33,497

Louisiana

            35,701

Maine

            10,916

Maryland

            47,719

Massachusetts

            60,978

Michigan

            74,395

Minnesota

            50,855

Mississippi

            20,488

Missouri

            49,475

Montana

              8,153

Nebraska

            17,665

Nevada

            21,451

New Hampshire

            11,639

New Jersey

            71,661

New Mexico

            14,731

New York

          162,576

North Carolina

            74,469

North Dakota

              8,291

Ohio

            94,534

Oklahoma

            29,753

Oregon

            30,587

Pennsylvania

          104,731

Rhode Island

              8,529

South Carolina

            34,779

South Dakota

              7,669

Tennessee

            50,372

Texas

          204,989

Utah

            23,413

Vermont

              5,619

Virginia

            68,662

Washington

            53,445

West Virginia

            14,068

Wisconsin

            51,633

Wyoming

              5,319

Puerto Rico

            16,438

Virgin Islands

                 702

More from Americans for Tax Reform

Top Comments


ATR Opposes Shift to Accrual Basis Accounting in Tax System


Posted by Ryan Ellis on Friday, January 31st, 2014, 5:01 PM PERMALINK


Americans for Tax Reform today sent a letter to Senate Finance Committee Chairman Max Baucus (D-Mont.) and House Ways and Means Committee Chairman Dave Camp (R-Mich.) expressing opposition to moving toward "accrual" based accounting in our tax system. 

Below is an excerpt:

I write today to express concern with a provision which has appeared in each of your drafts for business tax reform.  The “cash to accrual” proposal would result in a substantial tax increase for tens of thousands of American business owners and significantly increase their recordkeeping burdens--not for any benefit to our economy and job creation, but for the sole purpose of paying for tax reform...this accounting shift does not advance the goals of tax reform, in fact, it is counterproductive.  It does not make the system simpler, but rather more complex.  It does not promote fairness, certainty or consistency.  It will be a drag on economic growth and job creation. It does not take away anything which is unanimously considered a loophole or preference item.  Thousands of American businesses and owners would pay a significant price to accomplish nothing.  This proposal should be dropped if we are looking for successful small- and medium-sized businesses to remain job creators in a post-tax reform world.

Full letter text

More from Americans for Tax Reform

Top Comments


Obama to Call for Business Tax Hike in SOTU Speech


Posted by Ryan Ellis on Monday, January 27th, 2014, 12:50 PM PERMALINK


In his State of the Union speech on Tuesday night, President Obama will propose a net tax increase on American employers.

Dusting off a “corporate tax reform” plan from his 2012 campaign, the President will propose raising taxes on all employers while cutting rates for only the largest companies. Here’s how the plan works:

The President’s plan is a net tax increase. According to reports, the “offer” President Obama is making is to raise net taxes on employers, and use some of the tax increase revenue windfall to pay for Democrat-aligned union construction projects. The Republican House would never support a net tax increase, and using the money to fund Big Labor (and, by extension, Democrat campaign coffers) is hardly a sweetener. 

This “new” plan simply dusts off an unserious 2012 Obama campaign document. Back in 2012, President Obama’s re-election campaign put out a brief and rhetorical “corporate tax reform” plan. It was largely ignored at the time by serious policy analysts, but the Administration has done nothing to develop it in the intervening two years. ATR did analyses of the plan in 2012 and 2013. The plan raises taxes on all American employers, but only gives partial rate relief to the largest multi-national companies.

The plan leaves much to be desired:

Cutting the corporate rate to 28 percent will only help very large companies. According to IRS data, 32 million businesses file tax returns every year. Fewer than two million of them are corporations. These businesses tend to be the largest companies in the world. While their tax rate is too high, most successful employers pay an even higher tax rate.

Most American employers don't pay the corporate income tax. Most companies in America file and pay taxes using the individual tax rates. President Obama has already raised the tax rate paid by successful small and medium-sized businesses (via the fiscal cliff and Obamacare’s Medicare payroll tax rate hike). Taken together, this means that most employers face a top rate of close to 44 percent, plus state taxes. This is even higher than the 39 percent corporate income tax rate faced by large corporate firms.

The President’s plan only cuts taxes for multinational corporations, while raising taxes on Main Street businesses. Why does President Obama think it's a good idea for multi-national, giant corporations to pay a 28 percent tax rate while Main Street small employers continue to pay a 44 percent rate? All businesses lose their existing deductions and credits, but only the largest companies get rate relief in exchange. That's not fair, and it's not tax reform.

Even a 28 percent corporate rate is too high. According to the OECD, a 28 percent federal corporate rate (more like 32 percent after state corporate income taxes are factored in) would still be higher than every one of our major trading partners except Japan and France. We would still have a higher corporate income tax rate than major trade partners like Canada, Mexico, the United Kingdom, or Germany. The new rate would still be higher than the developed nation average of 25 percent.

Doubles down on international double-taxation. The U.S. is one of the only countries left in the world which seeks to tax the worldwide income of her companies (on top of income taxes already paid overseas). The smart tax reform move would be toward a territorial system, where only U.S.-source income is taxed (as Obama's own jobs commission recommended). This could be transitioned into with a round of repatriation

Rather than embracing this common-sense and globally-accepted idea, the Obama Administration wants to make the double taxation worse by imposing a global minimum tax rate. They also want to take away several of the tax provisions in law today which make this international double-taxation regime bearable for many companies.

Raises the cost of capital across the board. The Administration plan lengthens depreciation lives, which discriminates against business investment. The proper policy is permanent full business expensing. Businesses should be able to deduct the cost of all business inputs in the year incurred. Lengthening depreciation lives (and, likely, amortization periods) uses inflation and the time value of money to steal these ordinary business deductions. A deduction delayed is a deduction denied. More importantly, it incents business to consume rather than to invest in new plant and equipment.

Raises taxes selectively on producers of American energy. For a plan that claims to abhor "picking winners and losers," the Administration outline sure does pick one loser--energy producers. It reads them out of the Section 199 exclusion, repeals LIFO, curtails legitimate cost recovery, and increases the double taxation of international income (a sore point for the industry). Why is it a good idea to raise the cost of energy for every American family?

It is ironic that an administration lately focused on income inequality would put forward a tax plan which provides rate relief only to the largest multinational companies while raising taxes on small businesses.

More from Americans for Tax Reform

Top Comments


ATR Supports Rubio-Griffin Legislation to Prevent Insurance Company Bailouts


Posted by Ryan Ellis on Friday, January 24th, 2014, 5:00 PM PERMALINK


ATR is supportive of an important new bill introduced by Senator Marco Rubio (R-Florida) and Congressman Tim Griffin (R-Ark.)  S. 1726/H.R. 3541 would strip out of Obamacare an impending bailout of health insurance companies who will lose money in Obamacare exchanges.

Under the Obamacare law, "risk corridors" are created for participating insurance companies.  In this scheme, an insurance company which expends more than anticipated on Obamacare insurance claims will receive a bailout of up to 80 percent of their loss amount.  This bailout is intended to be funded by competing insurance companies who spent less than expected, but the bailout of insurance companies ultimately comes out of taxpayers' wallets.

Since very few Americans are actually signing up for Obamacare plans, it's very likely that most participating insurance companies will find themselves eligible for this bailout toward the end of 2014.  If Congress does nothing, insurance companies will receive a taxpayer-financed corporate bailout because the Obamacare system is broken and cannot be fixed.

That cannot be allowed to happen.  S. 1726  and H.R. 3541 would prevent this bailout of health insurance companies.  They are the ones that colluded with the Obama Administration to saddle the country with Obamacare, and they should be full partners in its losses.

More from Americans for Tax Reform

Top Comments


H.R. 7, the "No Taxpayer Funding for Abortion Act" is Not a Tax Hike


Posted by Ryan Ellis on Friday, January 24th, 2014, 12:10 PM PERMALINK


The U.S. House of Representatives will soon consider H.R. 7, the "No Taxpayer Funding for Abortion Act."  This bill has been scored by the Congressional Budget Office (CBO) as having a negligible effect on both tax revenues and direct spending.  That is, any effects the bill may have are so minor and small that they cannot be measured and should be discounted.

Some have claimed in the past that this legislation was a net tax increase, CBO and JCT scores notwithstanding.  ATR corrected those accusations back in 2011.  The analysis made then still stands today--this legislation is not a net tax increase, and has no interaction whatsoever with the Taxpayer Protection Pledge.

More from Americans for Tax Reform

Top Comments


Broad Conservative Movement Support for Obamacare Patient Protections


Posted by Ryan Ellis on Friday, January 10th, 2014, 6:00 AM PERMALINK


A joint letter from 21 conservative movement leaders has been sent to the U.S. House of Representatives supportive of their efforts this week to better protect Americans forced into Obamacare exchanges.  A PDF of the letter can be found here.  Highlights of the letter include:

"Today, the U.S. House of Representatives will be considering two ideas which would protect millions of Americans now forced to purchase health insurance in Obamacare exchanges.  The policy ideas behind these initiatives are not only positive—they are things which the American people should expect their government to be doing as a matter of course...

"The first measure would require the Department of Health and Human Services (HHS) to report within two business days to any American if their personal information has been stolen or unlawfully accessed through an Obamacare exchange... 

"The second measure requires the HHS secretary to provide detailed weekly reports to the American people about the enrollment success of Healthcare.gov...

"Most Americans would be shocked to learn that this level of protection and transparency is not already happening in a project the size and scope of Obamacare.  It is our hope that House efforts today will correct this injustice."

More from Americans for Tax Reform

Top Comments


CRS Says Marginal Tax Rates Don't Matter...Again


Posted by Ryan Ellis on Tuesday, January 7th, 2014, 3:29 PM PERMALINK


The Congressional Research Service (CRS) is supposed to be a non-ideological, fact-based research crack staff for House and Senate offices.  Besides being completely non-transparent with the public who pays taxes for them, however, CRS has started to show a decided liberal bias in the area of tax policy.

Back in September 2012 (you know, right before an election of some importance), CRS issued a study in which they maintained that raising or lowering marginal income tax rates had no effect on economic performance.  The Heritage Foundation's Curtis Dubay had this to say at the time:

The CRS report presents a slew of periods between 1945 and 2010 comparing the top marginal income tax rates and capital gains rates with economic growth rates. From these correlations the author concludes that lower rates do not correlate with stronger economic growth.

In fact, these stylistic correlations prove nothing. In short, the economy is more complicated than this simplistic approach can acknowledge. For the analysis to prove anything, it needed to account for countless other economic and policy factors, many specific to a given period, and determine how those factors influenced economic growth in the period in question. With this as background, the analysis would then have to isolate the effect lower rates had on growth.

CRS, and many others that argue against lower tax rates, mislead when they make such flimsy correlations because they fail to disclose that no two time periods are the same. Comparing 1950 to 2010 just on tax rates is ludicrous. The world and tax policy are entirely different in those timeframes. If CRS tried to account for all the differences, and then determine how tax rates influenced growth, it would find a different and more accurate answer: that lower rates encourage growth.

Well, apparently CRS is at it again.  They have re-released the report, and those who have read it tell me it makes the same points using the same methodological flaws.  I can't read it because it's firewalled, but there's a Tax Analysts writeup here (subscription required).

Curtis made another good point in his 2012 analysis which bears repeating here: marginal income tax rate change is one of the few areas in which the Left thinks taxes don't influence behavior.  The same people who think raising and lowering the capital gains tax rate has no impact on stock prices are the ones who tout the incentive-altering effects of carbon taxes, Tobin taxes, cigarette taxes, soda taxes, plastic bag taxes, etc.

So which is it?  Do taxes change behavior, or do they not?

More from Americans for Tax Reform

Top Comments


ATR Supports Protecting Americans from Obamacare Security Breaches


Posted by Ryan Ellis on Friday, January 3rd, 2014, 1:27 PM PERMALINK


ATR is supportive of efforts by the U.S. House of Representatives next week to protect Americans from personal data security leaks resulting from Obamacare website failures.

Reportedly, the House's bill will bring together the best ideas that members have had on the issue.  One of the better ideas has been introduced by Congressman Gus Bilirakis (R-Florida).  H.R. 3795, the "One Hour Notification Act of 2013" (aka the "OH No Act of 2013") would require the Department of Health and Human Services to notify any American of an Obamacare-related breach in their personal information, and it requires this to be done within one hour of the breach.  In addition, HHS must also notify relevant Congressional committees and produce an annual report.

Information can be stolen in an instant, and the American people deserve to know if their personal identification information is made available to unscrupulous hackers.  The Obama administration has insisted that the flawed healthcare.gov website remain active and mandatory, so they should also be required to come clean when that website fails to protect basic health consumer information.

More from Americans for Tax Reform

Top Comments


ATR Analysis of Budget Proposal


Posted by Ryan Ellis, Mattie Duppler on Wednesday, December 11th, 2013, 2:38 PM PERMALINK


Below is Americans for Tax Reform’s analysis of the Bipartisan Budget Act of 2013 (BBA13). We are deeply troubled by both the increase in the TSA user fee and the temporary relaxing of the spending caps for 2014 and 2015, but we are pleased by the permanent, large, long-term spending cuts contained in the legislation.

Long-Term Government Spending

Over the long term budget horizon, BBA13 is a large net spending cut.  Long-term numbers are not available, but the spending cuts included in the plan are permanent and mandatory.  It would take an act of Congress to amend them.  Meanwhile, the spending increases in the bill are limited to 2014 and 2015 only, leaving the 2016-2021 sequester budget caps unchanged. 

BBA13 does not set up an annual “patch” or “cliff” or give an excuse for Congress to re-adjudicate these cuts every year or two.  The 2014-2015 divergence from the discretionary spending caps’ trend line was a one-time event not repeated in the window.  The cuts to pay for this anomaly, however, are permanent and will reduce government spending by many times more than the small spending increases in 2014 and 2015.  BBA13 is a short-term discretionary spending increase dwarfed in size by a long-run mandatory spending cut.

Continuing Successful Spending Caps

There are also new sequester budget caps in 2022 and 2023 that didn’t exist before. This secures $22 billion in additional spending restraint. The sequester has netted the only real year-over-year reduction in outlays in the modern era, and extending them for as long as possible is a proven way to continue to rein in spending.

TSA Ticket Fee

By far, the worst element of BBA13 is the per-ticket airline fee hike that goes to the Transportation Security Agency (TSA.)  The TSA is a bloated, unionized government agency which should be privatized.  The TSA should not receive a special portion of money from every airplane ticket sold. 

ATR supports repealing the entire TSA ticket fee permanently, and replacing it with permanent spending cuts elsewhere.  ATR supports fully privatizing the TSA, which currently costs taxpayers $8 billion per year.

BBA13, however, structures the TSA ticket fee not as a tax, but as an offsetting receipt to pay for TSA “services.”  In so doing, this fee straddles the line between a tax increase and a user fee without technically crossing into tax hike territory – nevertheless, it should be replaced with spending cuts.  The provision is scored by CBO as a spending cut in the form of an offsetting receipt and has been since TSA was first created by Congress.

This is a very, very bad way to write legislation.  CBO’s scoring methodology here is gimmicky, and it does not hold up to strict scrutiny as a serious policy initiative. 

ATR is strongly opposed to this provision of BBA13, and urges Congress to replace it with permanent spending cuts elsewhere.

Government Employee Pensions

Federal employees currently receive both a 401(k) style pension and a defined benefit pension.  They have to contribute a percentage of their salary toward this defined benefit pension.  BBA13 increases this by 1.3 percentage points of salary for employees hired after January 1, 2014 (and who have not worked for the federal government for more than five years previously). 

This will take years to phase in, since it applies only to new employees.  However, once it is completed, it should save taxpayers $2 to $3 billion per year in today’s dollars by having government employees contribute more towards their own pension plan.

Military Pensions

When someone serves 20 years in the military, they get an immediate pension equal to 50 percent of their military annual salary.  Under current law, this pension amount increases with inflation annually.  Under BBA13, it would only increase at inflation-minus-one percentage point.  Upon retirement age (62), the veteran is held harmless by having their pension going forward plussed-up and their full COLA restored from there. 

This should save taxpayers about $1-2 billion per year in today’s dollars in perpetuity.

 

More from Americans for Tax Reform

Top Comments


ATR Supports Permanent End to Annual Medicare Doctor Bailout


Posted by Ryan Ellis on Monday, December 9th, 2013, 4:07 PM PERMALINK


If there’s one issue in Congress where taxpayers have been held over a barrel for years, it’s the annual patch to Medicare’s sustainable growth rate formula (SGR), universally known as “doc fix.”

More than a decade ago, Congress decided it would be a good idea to cut the rate at which Medicare reimburses doctors for services.  While this spending cut would be welcome, it’s been delayed again and again and again.  In fact, Congress has prevented this spending cut from moving forward a ridiculous seventeen times since 2002.  Most of the time, Congress simply moves the effective date of the cuts forward a year, and then does so again the next year.  “Doc fix” routinely attracts supermajorities (even of conservatives) in each chamber of Congress.

This is more than just harmless legislative inefficiency.  Because CBO must assume that doc fix will happen on time, Congress has used the toothless threat of the provider cuts to mask other spending.  According to Medicare's own trustees, SGR is a budget gimmick that hides the true cost of entitlements and their impact on the economy.  The very fact of SGR's existence forces government actuaries to report that Medicare is a much healthier long-term program than it actually is.  As a result, the urgency to reform Medicare is far less than if the accounting was more honest.

It’s a rigged con game that leaves taxpayers footing the bill for even higher spending after the annual “doc fix shakedown.”  Because everyone in Congress knows that doc fix is a train that’s moving down the tracks and will not be stopped, lobbyists line up to attach their favorite earmarks and deals to the annual legislation.  Doc fix is like a ship that attracts barnacles that hop along for the ride.

Thankfully, Congress seems to be in a mood to get rid of the annual doc fix con job once and for all.  Legislation being considered by the House Energy and Commerce Committee, House Ways and Means Committee, and Senate Finance Committee would call off the never-gonna-happen spending cut once and for all.  There are still many details to be worked out (including spending cut offsets), but the process moving forward is an important one for taxpayers.

In return for more certainty, doctors would be reimbursed based on quality of care rather than the current ATM-like “fee for service” method.  The current reimbursement method pays doctors more simply for doing more tests and services, whether they are useful to the patient or not.  Doctors instead should be incented to provide higher quality and coordinated care to patients and rewarded when costs are kept down.  Instead of paying for “volume” the system should pay for “value.”

Some will tell you that this permanent solution would appear to spend more money, but that’s based on a fantasyland baseline where Congress would ever let the planned spending cuts happen.  Congress has never let these spending cuts happen in any of the last dozen years, and it never will.  If we can concede that simple reality and take taxpayers out of the mugging zone every December, we’ll all be better off.  Congress is either going to spend the money in costly annual doc fixes which result in other spending and budget gimmicks, or they’re going to remove the whole phony setup once and for all.

We vote for getting this issue settled so taxpayers can focus on cutting spending rather than being cowed into annual bailouts for doctors.  It’s better for taxpayers and for patients.

More from Americans for Tax Reform

Top Comments


Pages

hidden