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Ryan Ellis

ATR Supports House Conservative<br> Budget for the Next Decade


Posted by Ryan Ellis on Wednesday, April 1st, 2009, 7:47 PM PERMALINK


The House Republican Study Committee (RSC) today released their budget alternative to the Pelosi-Reid-Obama budget.  This most free-market of budget plans is a winner for taxpayers in many ways:

•    It prevents a massive tax increase in 2011 by keeping the top rate at 35 percent and the capital gains/dividends rate at 15 percent.  The Pelosi-Reid-Obama budget hikes the top rate to nearly 40 percent, and the capital gains/dividends rate to 20 percent

•    If the Joint Tax Committee adopts “dynamic scoring” (i.e., a realistic assessment of how tax increases or cuts affect revenues given economic feedback effects), the Budget Committee shall be compelled to use these reality-based numbers

•    For 2009 and 2010, the House RSC budget cuts the capital gains/dividends tax rate to 0 percent in order to boost our sagging economy.  The Pelosi-Obama-Reid budget does nothing to increase incentives to create jobs and wealth

•    All told, taxes would stay below their modern historical levels as a percent of the economy.  It’s important to keep taxes low so that America’s economy can recover from wasteful Washington bailouts and other economic shocks caused by politicians.  The Pelosi-Reid-Obama budget actually pegs the tax burden slightly higher than the long-run average, killing hopes for strong growth

•    Spending as a percent of the economy would fall from 27.6 percent of GDP in 2009 to 17.9 percent of GDP in the last year of the budget window.  This brings federal spending in line with a common-sense tax burden to achieve budget balance.  In contrast, the Pelosi-Obama-Reid budget calls for federal spending to hit nearly 25 percent of GDP, well above levels seen since World War II
 

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ATR Supports H.R. 99, the<br> "Fair and Simple Tax Act"


Posted by Ryan Ellis on Wednesday, April 1st, 2009, 6:10 PM PERMALINK


 

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April 1, 2009


The Honorable David Dreier
U.S. House of Representatives
Washington, DC 20515


Dear Congressman Dreier:


Congratulations on your re-introduction of H.R. 99, the “Fair and Simple Tax (FAST) Act.”  This pro-growth tax plan would be the largest tax cut in history, and all Members of Congress should become co-sponsors.

The FAST Act would implement many pro-growth policy measures, including:

•    Making permanent the 2001 and 2003 Republican tax cuts on families, investors, and small business owners
•    An alternate personal income tax structure with three brackets, a 30% top marginal rate, and only the most popular deductions retained
•    Permanently killing the death tax
•    Indexing the AMT to inflation, with an eye toward eventual repeal
•    Cutting the corporate income tax top rate from 35% to 25%
•    Cutting the capital gains and dividends rate from 15% to 10%
•    Indexing the basis of capital assets to inflation when calculating gain
•    Implementing retirement savings accounts, lifetime savings accounts, and lifetime skills accounts
•    Creating a “standard deduction” for health insurance premiums of $7500 for individuals and $15,000 for families
•    Making permanent the research and development tax credit

It’s important that the FAST Act be re-introduced at a time when taxes are being pushed to record levels by President Obama and Congressional Democrats.  H.R. 99 provides a strong vision of a better and more prosperous America, and I encourage its broad support by pro-taxpayer Congressmen.


Sincerely,

 

Grover Norquist
GGN:rle
 

 

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ATR Endorses House GOP Budget


Posted by Ryan Ellis on Wednesday, April 1st, 2009, 10:52 AM PERMALINK


The House GOP today released their budget alternative to the Pelosi-Reid-Obama budget.  This highly-superior budget is a winner for taxpayers in many ways:

  • It prevents a massive tax increase in 2011 by keeping the top rate at 35 percent and the capital gains/dividends rate at 15 percent.  The Pelosi-Reid-Obama budget hikes the top rate to nearly 40 percent, and the capital gains/dividends rate to 20 percent 
  • It cuts the corporate income tax rate from 35 percent today—tied for highest in the developed world—to 25 percent (close to the average level of our European competitors).  It achieves this by broadening the corporate tax base.  The Pelosi-Obama-Reid budget keeps our corporate income tax rate the highest in the world, pushing jobs and capital overseas 
  • For 2009 and 2010, the House GOP budget cuts the capital gains/dividends tax rate to 0 percent in order to boost our sagging economy.  The Pelosi-Obama-Reid budget does nothing to increase incentives to create jobs and wealth
     
  • It creates an alternate tax system families can choose from.  They could either use the current code, with its higher rates and deductions, or opt into a new system.  This new system would feature only a standard deduction of $25,000 for married couples ($12,500 for singles), and personal exemptions of $3500.  However, the tax rates would be much lower.  The first $100,000 of taxable income ($50,000 for singles) would only face a 10 percent rate, with everything above that taxed at a 25 percent rate. The Pelosi-Reid-Obama budget traps Americans in our growth-killing and mindlessly-complex income tax code
     
  • The House GOP budget permanently patches the AMT, which prevents millions more families from having to calculate their taxes twice and pay the higher amount.  The Pelosi-Reid-Obama budget does nothing to prevent tens of millions of American families from falling into the AMT trap beyond 2010 
  • All told, taxes would stay below their modern historical levels as a percent of the economy.  It’s important to keep taxes low so that America’s economy can recover from wasteful Washington bailouts and other economic shocks caused by politicians.  The Pelosi-Reid-Obama budget actually pegs the tax burden slightly higher than the long-run average, killing hopes for strong growth 
  • Spending as a percent of the economy would fall from 27.6 percent of GDP in 2009 to 20.7 percent of GDP in the last years of the budget window.  This restores federal spending to about its modern historical average.  In contrast, the Pelosi-Obama-Reid budget calls for federal spending to hit nearly 25 percent of GDP, well above levels seen since World War II


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ATR Will Rate a Vote on the<br> Pelosi-Obama-Reid Trillion Dollar<br> Tax Hike Budget


Posted by Ryan Ellis on Tuesday, March 31st, 2009, 5:33 PM PERMALINK


Americans for Tax Reform WILL RATE a vote on the Pelosi-Reid-Obama budget.

Their budget taxes too much.  It will increase taxes for consumers of American energy, small business employers, and shareholders, to name just a few.

The Pelosi-Obama-Reid budget will hike the small business tax rate from 37.9 percent today to 42.5 percent in 2011.  Fully $2 out of every $3 in small business profits will see a tax hike.  One-third of working Americans—42 million people—work in small businesses that have fewer than 100 employees.

It will raise the capital gains and dividends tax rate from 15 percent today to 20 percent in 2011.  At a time when the stock market’s value has been cut in half, now is not the time to raise the tax rate on America’s nest eggs.

It will impose a global warming tax on American families that will cost them over $1000 per year.  It will take away tax breaks for energy companies, the cost of which will ultimately be bourn by American families who turn on a light switch or fill up their gas tanks.

Their budget spends too much.  The Pelosi-Obama-Reid budget raises spending to over $10,000 for every man, woman and child in America—forever.  As a percent of the economy, spending will be sustained at levels not seen for a generation.  About $1 out of every $4 in national wealth would be used to fund federal spending.  When state and local spending is included, total government spending will eat up one-third of the economy.  That puts America dangerously-close to Western European, “social democracy” levels of government spending.

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ATR Supports H.R. 735, the<br> "Rangel Rule Act of 2009"


Posted by Ryan Ellis on Monday, March 30th, 2009, 5:20 PM PERMALINK


ATR today released a letter supporting H.R. 735, the "Rangel Rule Act of 2009."

H.R. 735 waives penalty and interest on any underpayment of income taxes by U.S. citizens.  All a taxpayer would have to do is write “Rangel Rule” on their 1040, and they would get to enjoy the same grace and leniency as is evidently enjoyed by House Ways and Means Committee Chairman Charlie Rangel (D-NY).

Chairman Rangel has admitted that he failed to pay income tax on rental property he owns in the Caribbean.  If ordinary taxpayers did that, they would be lucky to get away with penalties and interest totaling in the thousands of dollars.  Yet politicians like Charlie Rangel, who are responsible for writing tax law, seem to get a free pass again and again.

If it’s good enough for Charlie Rangel, it should be good enough for Joe and Jane Taxpayer.

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ATR Supports H.R. 1763,<br> "Responsible Reinvestment Act of 2009"


Posted by Ryan Ellis on Monday, March 30th, 2009, 5:06 PM PERMALINK


ATR today released a letter praising Congressman Bob Latta for introducing H.R. 1763, the "Responsible Reinvestment Act of 2009."  This small business tax cut bill:
 

  • Permanently kills the death tax
  • Doubles small business equipment expensing to $500,000 per year
  • Provides first-year expensing for manufacturing and agricultural equipment
  • Creates a new tax deduction for 20 percent of self-employment income
  • Allows health insurance premiums to be fully-deductible for small employers
  • Allows health savings account (HSA) contributions to be fully-deductible for small employers
  • Creates a super-charged small business retirement account that would allow small employers to save nearly $50,000 per year for retirement, fully tax-deductibly
     

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The Mortgage Interest Deduction and the Taxpayer Protection Pledge


Posted by Ryan Ellis on Friday, March 27th, 2009, 1:38 PM PERMALINK


In recent days, the question has come up on NRO's the Corner, as well as here and here about what ATR's position would be on repealing the mortgage interest deduction.

I've already responded to the Corner on this, but also wanted to clarify here.

The mortgage interest deduction is not some spending program.  It's a tax cut built into current tax law.  To get rid of it and do nothing else is to raise income taxes by about $100 billion per year, every year.  This would be a Taxpayer Protection Pledge violation.  172 Congressmen and 35 Senators have signed this no income tax increase Pledge.

Does that mean getting rid of this deduction everywhere and anywhere is a Pledge violation?  No.

One could get rid of this tax deduction and lower tax rates.  Or, one could get rid of this tax deduction and increase deductions and credits somewhere else.  The important thing is that you want to avoid an income tax increase on net.

The criticism that the mortgage interest deduction tends to raise the price of housing and create bubbles is probably true based on what I've read, but I'm no economist.  In any event, that discussion is outside the bounds of the Taxpayer Protection Pledge, and people of good will can be Pledge-compliant and either agree or disagree with that position.

Hope this clears things up.

 

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The House Democrat Budget<br> Taxes Too Much


Posted by Ryan Ellis on Thursday, March 26th, 2009, 3:13 PM PERMALINK


•    The House Democrat budget resolution reported out of the Budget Committee taxes too much

•    Under the committee’s budget, tax revenues are scheduled to rise from $2.2 trillion in 2009 to $3.3 trillion in 2014.  That is a $1.1. trillion increase in tax revenues in just five years, or $3600 for every man, woman, and child in America

•    Expressed as a percent of the economy, taxes would rise from 15.7 percent of GDP in 2009 up to 19.2 percent of GDP in 2014, well above the post-War historical average of 18.5 percent of GDP

•    The budget calls for tax revenue growth of 7 percent a year after inflation

•    Federal taxes in 2014 would exceed $10,000 for every man, woman, and child in the United States, which has only happened a handful of times since the Second World War (even adjusting for inflation)

•    The tax rate on $2 out of every $3 in small business profits would rise from 37.9 percent today to 42.5 percent in 2011. 

•    This small business tax hike also affects the 42 million Americans who work at small businesses with fewer than 100 employees

•    The tax rate on capital gains and dividends would rise from 15 percent today to 20 percent in 2011.  This will lower the price of every stock in the stock market, which in turn takes a bite out of every American’s 401(k) plan or IRA

•    This budget will result in massive tax increases on American-made energy.  The worst of these is the “cap and tax” proposal of the Obama Administration and his allies on Capitol Hill.  According to a CBO score of the most popular version of this, “cap and tax” will raise energy bills by about $1000 for every family in America, every year
 

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Obama vs. Fact:<br> Taxes and the Latest Press Conference


Posted by Ryan Ellis on Wednesday, March 25th, 2009, 12:23 PM PERMALINK


A Tax Cut for 95 Percent of Working Families?

OBAMA:    “…this plan will provide a tax cut to 95 percent of all working families that will appear in people’s paychecks by April 1.”

FACT:    Obama is referring to the “Making Work Pay” refundable tax credit, which will begin to show up in the form of less withholding from paychecks on April 1.  This part of his statement is true.  However, it’s impossible to cut taxes for “95 percent of working families.”  According to IRS data, one-third of all income tax filers don’t have an income tax liability.  About 15 percent of all working families don’t even have a FICA tax liability, and these numbers are before taking into effect all the new refundable tax credits of the Obama budget.  For these “working families,” all Obama’s budget will do is cut them a welfare check.


Is the Tax Code Skewed Toward the Rich?


OBAMA:    “…for the top 5 percent, they’re the ones who typically saw huge gains in their income…let’s not renew the Bush tax cuts…let’s go back to the rates that existed…during the Clinton era”

FACT:    Obama gives the impression here that the tax code has gotten friendlier to the rich since the Clinton years.  A simple check of the data, though, shows that the rich are paying a higher percentage of federal income taxes than ever before.

In order to be in Obama’s “top 5 percent,” a family must earn at least $150,000—from all income sources combined.  Putting aside that this is well under the $250,000 that Obama says he will be raising taxes on, this is hardly a figure that most Americans would consider “rich.” 

It might surprise many to learn that this “top 5 percent” is paying a higher and higher percentage of all income taxes.  Back in 2000, the last year of the Clinton Administration, these households were paying 56 percent of all income taxes.  In 2005, the latest year for which the IRS has data, they were paying nearly 60 percent of all income taxes.  So after tax rates on small businesses and investors were dropped, the tax code became more progressive, not less.  There’s no “problem” to fix.

What about the “richest of the rich,” the top 1 percent?  These families make at least $365,000 per year.  In 2000, they paid 37 percent of all income taxes.  That number today is nearly 40 percent.  So even the richest households are paying a higher amount of all income taxes then they were before the tax cuts of the Bush era.


Demonizing Investors and Entrepreneurs

OBAMA:    “…the rest of us can’t afford to demonize every investor or entrepreneur who seeks to make a profit.  That drive is what has always fueled our prosperity…”

FACT:    This is 100% true, so what is it doing in a myth/fact?  The problem is, the Obama budget doesn’t square with the Obama rhetoric.  His budget calls for massive tax increases on investors.  The capital gains and dividends tax rate will rise from 15 percent to 20 percent.  The death tax will go from dead to 45 percent overnight.  The top tax rate on small businesses will rise from 37.9 percent to 42.5 percent, and that’s before his promised Social Security tax hike.

If that’s not using the tax code to demonize investors and entrepreneurs, what is?

 

Is the Deficit the Issue, or Is It Spending?

OBAMA:    “(Questioner) Do you worry that your daughters…will be inheriting an even bigger fiscal mess if the spending goes out of control?”  “(Obama) Of course I do, which is why we’re doing everything we can to reduce that deficit.”


FACT:    Obama is focusing on the wrong target.  The questioner asked, correctly, if he was okay passing along a spending budget as big as Obama is proposing to his daughters.  Obama ignored the fact that his budget grows the size of government to levels not seen since World War II.  Instead, he focuses on deficits, which is an uninteresting number you get by subtracting one interesting number (spending) from another (taxes).  A balanced budget won’t help Obama’s daughters if they are forced to pay taxes to support a government 50% bigger than the one their father inherited.

 

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