Ryan Ellis

ATR Opposes Gregg-Conrad<br> Bipartisan Tax/Spending Commission Bill


Posted by Ryan Ellis on Wednesday, December 9th, 2009, 1:24 PM PERMALINK


Americans for Tax Reform President Grover Norquist sent the following letter today to Senators Judd Gregg (R-N.H.) and Kent Conrad (D-N.D.):

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I write to express in the strongest possible terms Americans for Tax Reform’s opposition to your “Bipartisan Task Force for Responsible Fiscal Action Act of 2009.”  As written, it would lead to a guaranteed tax increase.

The bill establishes an eighteen-member task force comprised of ten Democrat and eight Republican Congressmen, Senators, and Administration officials.  A report from the commission would need to gather fourteen votes in order to make an expedited recommendation to both bodies.  The recommendation would only pass with a supermajority vote in each chamber.

Despite the appearance of protection for taxpayers, this commission would guarantee a net tax increase be in its proposal.  Every Democrat on the commission would insist on tax increases to “balance” spending cuts in the recommendation.  There is no conceivable scenario whereby the commission would issue a report that does not contain tax hikes.  Therefore, this commission is unacceptable from a taxpayer perspective.

In order to make this commission acceptable from a taxpayer perspective, language must be included that explicitly removes tax increases and/or new taxes from commission consideration.

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ATR Opposes H.R. 4173, <br>Tax Hikes on Financial Services


Posted by Ryan Ellis on Tuesday, December 8th, 2009, 6:55 PM PERMALINK


ATR President Grover Norquist sent the following letter today to House Financial Services Chairman Barney Frank (D-Mass.):

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Americans for Tax Reform is opposed to H.R. 4173, the “Wall Street Reform and Consumer Protection Act of 2009.”  Besides raising the cost of government with onerous new regulations on the financial services sector, H.R. 4173 is a net tax increase.

According to the Congressional Budget Office and the Joint Tax Committee, net tax revenues would increase by $4.9 billion over the 2009-2019 budget window.  These tax hikes are the result of new fees assessed on the financial services sector in order to pay for the new regulations on that same sector.

Increasing taxes and regulations on financial services companies will only result in fewer and more expensive financial services offered to the American people.  The old maxim, “if you want less of something, tax it more” certainly applies here (and one might also insert “regulate” instead of “tax”). 

Raising taxes on vital services needed by everyone—at least everyone who owns a home, has a credit card, or has opened an IRA—is foolish public policy.

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ATR Expresses Disappointment in<br> H.R. 4213, the "Tax Extenders Act of 2009"


Posted by Ryan Ellis on Tuesday, December 8th, 2009, 6:30 PM PERMALINK


Americans for Tax Reform president Grover Norquist today sent the following letter to House Ways and Means Chairman Charlie Rangel (D-N.Y.):

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On behalf of Americans for Tax Reform, I wanted to express my disappointment in H.R. 4213, the “Tax Extenders Act of 2009.”  In particular, this bill continues a bad tax practice which has been characteristic of your reign as Chairman of Ways and Means: namely, temporarily extending current tax law and “paying for it” with new, permanent tax increases.

Every year or two, Congress “extends” tax provisions which are scheduled to expire.  Congress only lets these provisions threaten to expire to create a “must-pass” bill.  This bill often becomes a vehicle for controversial legislation.  While unseemly, this “train leaving the station” tactic has been used by many Congresses controlled by both Republicans and Democrats.

What makes this tactic distasteful in recent years has been the Democrat leadership’s attempt to legislate permanent new tax hikes merely to extend current tax law.  The new tax hikes are permanent, while the extended tax law is only one or two years.  Over time, the accumulation of these new and permanent tax hikes results in very large increases in the overall net tax burden.

H.R. 4213 has one new tax increase that will hit hardest on charities, university endowments, and defined benefit pension plans.  The bill taxes capital gains earned by investment partnership managers not as capital gains (which is what they are), but as ordinary income.  This raises the tax rate on this “carried interest” in an investment partnership from 15 percent today to 35 percent in 2010 and 39.6 percent in 2011.  Managers of investment partnerships will demand a bigger profit share to compensate for these higher taxes.  That reduces the profit remaining for the limited partners—who are most often charities, university endowments, and defined benefit pension plans.

This bill is anti-taxpayer.  Requiring taxpayers to give Uncle Sam more money just to keep current tax rules in place is akin to paying the mob not to smash your windows in.

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Obama Tax Panel to Create "Public Option"<br> Boondoggle in Tax Return Preparation


Posted by Ryan Ellis on Monday, December 7th, 2009, 5:36 PM PERMALINK


There's a lot of talk in Washington these days about a so-called "public option" in healthcare.  It would be a bad thing, because it would create a taxpayer-subsidized competitor to private sector insurance companies.  Most people suspect that, over time, this subsidization would incent people to enroll with the "public option" over private providers.

The "public option," therefore, is simply single-payer health insurance with an additional step to make it less obvious.

It might surprise you that the Obama Administration is looking to do something similar with, of all things, tax preparation.  Former Federal Reserve Chairman Paul Volcker is heading up a commission to reform both the tax code and tax administration.  The final report was due out this month, but has been delayed until after the holidays.

It's widely expected that a new "public option" for tax preparation will be included in the recommendations.  Like its health insurance cousin, a tax-prep public plan would eventually cripple the private sector tax preparation industry.

Why should you care?  Well, if the IRS (or another government agency) is preparing your tax return, all the many gray areas of a return would be ruled in favor of the government (that is, in favor of higher taxes).  Think of it like a football officiating crew hired by the home team.  Would you want to play on that field?

As we get closer to the release date, ATR will have a "Fact of the Day" on why private tax preparation is good for taxpayers, and why a government-run tax prep regime would be a stealth tax increase.

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Comprehensive List of Marriage Penalties<br> In House and Senate Healthcare Bill


Posted by Ryan Ellis on Monday, December 7th, 2009, 4:30 PM PERMALINK


It's not often you see good, solid policy analysis coming out of a Congressional campaign.  A happy and notable exception is this study by Allen Quist, a candidate for Congress in the first district of Minnesota.

He's put together a comprehensive list of all the marriage penalties in the Senate health bill.  You can read the full list on his website.  Suffice it to say, there is a huge incentive in these bills to co-habitate rather than get married.  There is also a huge incentive to try to make less than 400 percent of the federal poverty line.

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ATR Will Rate Any and All Votes To Kill the Death Tax


Posted by Ryan Ellis on Thursday, December 3rd, 2009, 12:36 PM PERMALINK


This afternoon, the House will be voting on a bill to permanently create a death tax with a 45 percent rate and a $3.5 million exemption.  This bill has many challenges, and will not be supported by Americans for Tax Reform.

The House Republicans will be offering an alternative to kill the death tax permanently.  ATR is proud to support and endorse this effort, and will be key-voting in favor of full and permanent death tax repeal  in our annual “Hero of the Taxpayer” awards.

Should the House GOP not prevail in their push for full and permanent death tax repeal, they may next attempt to extend the scheduled 2010 temporary repeal of the death tax for a longer period.  ATR would be proud to support a temporary extension of 2010’s “no death tax” rules should permanent repeal be off the table.  We would urge all members to support it, and will be key-voting in favor of such a vote in our annual “Hero of the Taxpayer” awards.

ATR WILL RATE A VOTE IN FAVOR OF PERMANENTLY KILLING THE DEATH TAX

ATR WILL RATE A VOTE IN FAVOR OF TEMPORARILY KILLING THE DEATH TAX IF PERMANENT REPEAL IS NO LONGER AN OPTION

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Five Job Killers That Won't Be Discussed<br> At the White House "Jobs Summit"


Posted by Ryan Ellis on Thursday, December 3rd, 2009, 6:00 AM PERMALINK


The White House today is hosting a “jobs summit” which is meant to discuss how to prevent further job losses (nearly 3 million since the stimulus passed).
 
“Employers are hesitant to create jobs because of looming threats on the horizon—threats caused by the policies pursued by President Obama, Speaker Nancy Pelosi, and Leader Harry Reid,” said ATR President Grover Norquist.  “Job losses will continue and future job creation will be impeded until at least some of these dangers are removed:”

Looming tax hikes.  On New Years Day 2011, just thirteen months from now, job creators will see a tidal wave of new taxes.  The tax rate at which two-thirds of small business profits are taxed will rise from 35 percent to 39.6 percent.  Start-up firms looking to attract investment will see the capital gains tax rise from 15 to 20 percent.  Family farms and small businesses will see a death tax with a 55 percent top rate and a paltry $1 million exemption. How can businesses think about expanding in this tax environment?

Government-controlled healthcare.  The House and Senate are debating healthcare bills which put even more taxes on small businesses (the House bill creates a new “surtax” on them), and all employers (if they don’t purchase expensive health insurance for their employees).  With the fate of government-controlled healthcare up in the air, and the possibility of new mandates and taxes, who would take on more employees?

Forced unionization. Under the card check bill, entrepreneurs looking to expand their businesses and hire new employees will have to evaluate if they are bringing in a union organizer.  The unions will be allowed to bring government arbitrators to force businesses into binding contracts that determine wages, benefits, pension plans, etc. Approximately 600,000 jobs would be lost in the first year alone.

Energy taxes and regulations. Climate change legislation is quite possibly the single greatest threat to jobs today. If passed, the increased taxes, costs, and regulations will drive jobs out of this country at a staggering pace. Even if you consider the “green jobs” that proponents claim will be created, The Heritage Foundation found that 1,145,000 net jobs would be lost per year because of the Waxman-Markey bill.

Protectionism. While protectionist measures are often enacted for the purpose of shielding domestic industries from "unfair trade practices," all indications are that they instead punish the multiple industries that rely on imports for their material inputs such as steel and raw materials.  When input costs increase as a result of a rise in import tariffs, industries must cut costs elsewhere, the most likely being labor costs, meaning jobs.  This was the case in 2002 when an increase in the price of steel tariffs resulted in 200,000 American jobs lost.

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Baucus Lies About Tax Hikes in Senate Health Bill


Posted by Ryan Ellis, John Kartch on Wednesday, December 2nd, 2009, 10:23 AM PERMALINK


Speaking on the U.S. Senate floor on Monday, Max Baucus falsely claimed that the health bill under consideration does not raise taxes:

“I have also heard it argued that health care reform will raise taxes.  That, too, is false. In fact, health care reform will provide billions of dollars in tax relief to help American families and small businesses afford quality health insurance—tax cuts.  The Joint Tax Committee—again bipartisan and which serves both the House and the Senate—tells us, for example, that our bill would provide $40 billion in the tax cuts in the year 2017 alone—$40 billion in tax cuts in the year 2017.”
 
In fact, the net tax increase (that is, taking into account the tax cuts Baucus mentions) in 2017 alone is a staggering $132.5 billion. Over the first decade of the tax increases taking effect, the net tax increase easily exceeds $1 trillion. 
 
“Senator Baucus needs to explain how a ten-year, trillion-dollar net tax increase is actually a tax cut,” said Grover Norquist, president of Americans for Tax Reform.
 
The official tax score for the bill is provided by the Joint Tax Committee (JCT) and the Congressional Budget Office (CBO). In 2017 alone, they report a net tax hike of $132.5 billion – not a tax cut as Sen. Baucus claims. Over the ten-year scoring window, they report a net tax hike of $857.9 billion.
 
Americans for Tax Reform (ATR) has compiled a comprehensive list of all the tax increases in the Senate health bill. (To view the complete list, click here) Among other things, the bill raises taxes on current health insurance plans, families lacking health insurance, and small employers.
 
“After Senator Baucus is through actually reading the official tax score, he might want to read ATR’s list detailing the eighteen separate tax increases in this bill,” said Norquist.

Click here for a printable PDF of this document

 

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ATR Supports Full Repeal of Death Tax


Posted by Ryan Ellis on Monday, November 30th, 2009, 2:56 PM PERMALINK


ATR sent the following letter today to Congress (read full version):

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This week, the U.S. House of Representatives is scheduled to vote on H.R. 4154, a bill which would create a permanent death tax structure with a top rate of 45 percent and an exemption level of $3.5 million.

H.R. 4154 is a tragic departure from years of Congressional intent to kill the death tax.  Rather than bury the death tax in a mere 31 days (as is called for under current law), this bill would create a new 45 percent rate in 2010 and into the future.

H.R. 4154 fails to index the death tax for inflation.  By setting the exemption at the 2009 level of $3.5 million and failing to index to CPI, more and more households, small businesses, and family farms will find themselves with a death tax liability.  The same is true of the death tax brackets—the top rate will apply to taxable estate sizes over $1.5 million.  Assuming historical inflation, these death tax levels will be cut in half in real terms with every passing generation (20 to 25 years).  This “death tax generational bracket creep” harkens back to the stagflation and savings erosion of the 1970s.

H.R. 4154 would leave the United States with the third-highest death tax rate in the developed world.  According to a 2007 study by the American Council for Capital Formation, only South Korea and Japan would have a higher top death tax rate than the U.S.  In fact, half of the developed countries in their survey have no death tax whatsoever.  In a world of increasingly-mobile capital, having one of the highest death tax rates in the world simply makes no sense.

H.R. 4154 would leave in place the most unpopular tax among U.S. voters.  Polls consistently have shown for nearly two decades that between 67 and 75 percent of likely voters favor full and permanent repeal of the death tax.  This is remarkable considering that only a small percentage of estates will ever be liable for the tax.  Any Congressman voting for H.R. 4154 would find themselves in a decided minority.

Americans for Tax Reform remains committed to fully and permanently repealing the death tax.  We stand willing to support legislation which does so.

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Senate Health Bill Raises Taxes<br> On Special Needs Kids and Their Families


Posted by Ryan Ellis on Friday, November 20th, 2009, 2:01 PM PERMALINK


  • There are 18 separate tax hikes in the Reid-Obama healthcare bill.  One of them caps the amount that can be deferred in Flexible Spending Accounts (FSAs) at $2500 per year (a similar provision was included in the Pelosi-Obama health bill and written about by Congressman Cathy McMorris-Rogers, R-Was., for National Review Online).  There is currently no limit to how much can be saved, though all monies must be used by the end of the year.  Employers may put a cap in place for their employees, but this would put a cap in federal tax law for the first time.  According to the Employee Benefit Research Institute (EBRI), 30 million American families use an FSA. 
  • For most people, the $2500 cap won’t be noticed.  FSAs tend to be used for things like small deductibles, co-payments, eyeglasses, over-the-counter medicines, and laser eye surgery.  The amount deferred in the typical FSA is probably much less than $2500 today 
  • 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 education.  According to IRS Publication 502, Medical Expenses:

    You can include in medical expenses fees you pay on a doctor's recommendation for a child's tutoring by a teacher who is specially trained and qualified to work with children who have learning disabilities caused by mental or physical impairments, including nervous system disorders.

    You can include in medical expenses the cost (tuition, meals, and lodging) of attending a school that furnishes special education to help a child to overcome learning disabilities. A doctor must recommend that the child attend the school. Overcoming the learning disabilities must be a principal reason for attending the school, and any ordinary education received must be incidental to the special education provided. Special education include teaching Braille to a visually impaired person; teaching lip reading to a hearing-impaired person, or giving remedial language training to correct a condition caused by a birth defect.

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