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Ryan Ellis

Obama Floats Latest Tax Hike:<br> Health Care Benefits Tax

Posted by Ryan Ellis on Monday, July 27th, 2009, 5:57 PM PERMALINK

Over the weekend, President Obama floated his latest tax hike plan in a desperate attempt to rescue his failing government healthcare plan.  Under the idea, any family plan premium in excess of $20,000 would have to pay income taxes on the overage.

A few points here:

  1. Because this would be a net income tax increase, this idea would violate the Taxpayer Protection Pledge
  2. Because this idea does not distinguish the income of the taxpayers, it would violate Obama's promise not to tax families making less than $250,000 per year
  3. Because this tax increase would simply use the dollars to increase government spending, it can in no way be called "tax reform."  It's just a plain old tax hike.

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How Progressive Can the Income Tax Get?

Posted by Ryan Ellis on Tuesday, July 21st, 2009, 6:00 AM PERMALINK

I did a post on National Journal's economy blog, so go check it out.  It questions whether the Obama/Congressional Democrat plan to raise tax rates will make the income tax more progressive.

Short answer: no.  It will lead to sheltering.  What made the code more progressive over the past decade (and it's gotten more and more progressive) is that lower rates lead to more disclosure of taxable income.

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How Many Uninsured Are There, Really?

Posted by Ryan Ellis on Tuesday, July 21st, 2009, 6:00 AM PERMALINK

Keith Hennessey has a great breakdown of what the real number of uninsured is in America.  The short answer is that there is NOT, in fact 47 million.  It's a great deal less:

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Open Letter from ATR to Congress:<br> No More Spending Until Obama Releases<br> Latest Economic Data

Posted by Ryan Ellis on Monday, July 20th, 2009, 7:02 PM PERMALINK

An open letter to the United States Congress:


This week, you will continue to vote on multi-hundred billion dollar appropriations bills that continue to put the budget into the red and keep taxpayers on the hook.  At the same time, the Obama Administration this week announced it was putting off revealing the updated over-spending (aka "deficit") numbers for this fiscal year until the August recess.

The clear intent is to neither impede the march toward high-tax government medicine, nor to give the Congress any pause in writing more checks on the taxpayer account.  Reports indicate that the spending-over-taxes for 2009 may approach $2 trillion.  This is a vast sum when one considers that it's over four times last year's level, and is equal to all of federal spending as recently as 2002!

As such, Congress simply doesn't have all the facts to proceed.  It's unconscionable to be voting on bills totaling hundreds of billions of dollars each without knowing how much of an over-spending problem we have.

Therefore, I am calling on the Congress to suspend all legislative activity that involves appropriating taxpayer dollars until the Obama Administration sees fit to release its latest estimate of the over-spending amount for 2009.


Grover Norquist

Click here for a PDF of this Document

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ATR Supports H.R. 3218, "Improving Health Care for<br> All Americans Act" by Cong. John Shadegg

Posted by Ryan Ellis on Thursday, July 16th, 2009, 3:12 PM PERMALINK

ATR sent the following letter today to Congressman John Shadegg (R-AZ):

Congratulations on your introduction of H.R. 3218, the “Improving Health Care for All Americans Act” this week.  Your free-market health care bill gives all Americans better options for health care without raising taxes or increasing the role of government.

The heart of H.R. 3218 is the creation of refundable and advanceable tax credits for the purchase of health insurance or other health coverage.  This $5000 family credit (half that for singles) is an additional option for getting a healthcare tax benefit.  Existing options—most namely the employer-provided exclusion—remain in place as alternate mechanisms.  Unlike other plans which would displace existing coverage, the “Improving Health Care for All Americans Act” truly gives a “yes-and” solution.

Additionally, H.R. 3218 creates “Individual Membership Associations.”  This would allow any American to join in a national pool in order to purchase coverage.  In so doing, more Americans will have greater access to affordable insurance.

Finally, H.R. 3218 provides a $0.50 on the $1.00 federal match to states to incentivize the creation and full funding of high risk pools.  Over the past decades, dozens of states have found that high risk pools are the best solution for the most difficult cases.  Some Americans just can’t qualify for insurance without a government mandate, but high risk pools allow insurance companies to bring someone on with a bit more of a safety net.  No American should be left behind if they want to purchase affordable insurance, and high risk pools ensure that even our sickest neighbors can get health insurance.

All Members of Congress should co-sponsor H.R. 3218, the “Improving Health Care for All Americans Act.”

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Will Congress Turn to a VAT to<br> Pay for Health Care Spending?

Posted by Ryan Ellis on Thursday, July 16th, 2009, 3:07 PM PERMALINK

Now that the Congressional appetite for a small business surtax or taxing your health benefits seems to be cratering, taxpayers need to be on the lookout for the next tax hike idea to be floated.

One good candidate would be a VAT. 

ATR has an Anti-VAT caucus, and has for years.  Click here to read what George Will has to say on a VAT.

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House Dem Healthcare Tax Hike<br> Breaks Obama's Tax Pledge

Posted by Ryan Ellis on Wednesday, July 15th, 2009, 3:33 PM PERMALINK

Besides being the largest tax hike in American history, the House Democrat health care tax increase breaks Obama’s pledge not to raise any taxes on any American making less than $250,000:

“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.” (Barack Obama, September 12, 2008, Dover, NH)

The following tax increases will directly hit Americans making less than $250,000 per year:

  • a tax on individuals failing to sign up for health care equal to the lesser of 2.5% of adjusted gross income (AGI) or the average individual premium amount.  There is no income floor on this, so this would hit any uninsured American of any income
  • a tax on employers for not providing a health care plan equal to 8% of payroll.  This becomes 0, 4, or 6 percent of payroll as payday totals dip below $400,000 annually.  This will even hit the smallest of small businesses, those making profits of less than $250,000
  • codification of the "economic substance doctrine," whereby taxpayers would not be able to engage in legal tax avoidance techniques without demonstrating a bona fide business purpose.  This would apply not only to large companies and wealthy individuals, but any taxpayer of any income who engages in a legal tax avoidance technique

These are only the tax increases which would fall directly on Americans making less than $250,000.  This doesn’t account for the other tax increases in the bill on small businesses which will kill jobs and slash wages.

President Obama should publicly repudiate these taxes, which are a clear and direct violation of his campaign promise he made again and again in 2008 not to raise any taxes at all on families making less than $250,000.

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Surtax to Pay for Government Medicine<br> Is a Taxpayer Protection Pledge Violation

Posted by Ryan Ellis on Monday, July 13th, 2009, 11:31 AM PERMALINK

On Friday, House Ways and Means Committee Chairman Charlie Rangel (D-NY) announced a new tax increase to pay for government-controlled health care. Under the plan, taxpayers making as little as $280,000 per year will see a surtax of between 1% and 3% of adjusted gross income. 

This “surtax” is merely a thinly-veiled way to raise the top marginal tax rate.  A 3% surtax on married couples making $1 million or more would raise the top marginal tax rate in 2011 to 42.6%, up from 35% today.

Raising income taxes at all, and marginal tax rates in particular, is a clear and unambiguous violation of the Taxpayer Protection Pledge.  This Pledge has been made by 172 Congressmen and 34 Senators to their constituents and the American people.  They promised not to raise income taxes or marginal income tax rates.

The news is worse for small business owners.  Small business profits face taxation on their owners’ 1040 forms.  Two-thirds of small business profits pay taxes in households making at least $250,000 per year.  Thus, this marginal tax rate increase is a tax hike on $2 out of every $3 small business dollars.

This marginal tax hike will affect small employers and their employees.  One-third of Americans work in firms with 2 to 100 employees.  These small businesses, which must have profits to employ workers, will face these marginal tax rate hikes.  The cost will be born out in lower wages and less jobs.

Why raise taxes on job-creating small businesses in the middle of a deep recession with 10% unemployment?  It makes no sense to do this economically.  When Medicare payroll taxes and state income taxes are added to the mix, a small employer could easily face marginal tax rates approaching 50%, which would be the highest level since the stagflation 1970s.

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Health Care Tax Hike Trial Balloon of the Week: Tax Hike on Small Business

Posted by Ryan Ellis on Tuesday, July 7th, 2009, 11:07 AM PERMALINK

Proponents of government-run health care have a problem—they can’t pay for their trillion-dollar plan. So, they want to raise your taxes. Every week, there’s a new tax hike floated—a VAT, a soda tax, taxing your health care benefits, and taxing your charitable contributions to name just a few.

This week, House Ways and Means Chairman Charlie Rangel (D-NY) dusted an old idea off the shelf, a plan he proposed two years ago. He would like to impose a “surtax” (a disguised marginal income tax rate hike) on those making more than $250,000 per year.
This would mean that the top income tax rate would climb well over 40 percent.  That would hit small businesses the hardest of all. Why is that?
  • Small businesses pay taxes on their owners’ 1040s
  • Two out of every three dollars of small business profits has tax paid in this top personal tax rate
  • There are 28 million sole proprietors, business partners, and Subchapter-S corporation owners in America. Most of the profits generated by these companies will face a higher marginal tax rate
  • One-third of Americans work for businesses with fewer than 100 employees. When these successful small businesses have to pay higher taxes, they will cut wages and lay people off
No matter which way you slice it, you can’t raise taxes on “the rich” without having most of that burden fall on small business. They, in turn, will shed jobs or even close up shop.
All for the sake of health care with the efficiency of the Post Office and the customer service of the DMV. 

Click here for a PDF of this document

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Left Continues to Telegraph VAT Strategy

Posted by Ryan Ellis on Tuesday, June 30th, 2009, 5:13 PM PERMALINK

You can't say they didn't warn us.  The latest indication that a value-added tax (VAT) is on the table comes in today's Wall Street Journal by former Clinton Administration Deputy Treasury Secretary Roger Altman:

We all know the recent and bitter history of tax struggles in Washington, let alone Mr. Obama's pledge to exempt those earning less than $250,000 from higher income taxes. This suggests that, possibly next year, Congress will seriously consider a value-added tax (VAT). A bipartisan deficit reduction commission, structured like the one on Social Security headed by Alan Greenspan in 1982, may be necessary to create sufficient support for a VAT or other new taxes.

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