Ryan Ellis

Individual Health Mandate With<br> An Income Tax Surtax<br> Is A Pledge Violation


Posted by Ryan Ellis on Monday, April 27th, 2009, 2:21 PM PERMALINK


Americans for Tax Reform today released the following advisory to Congress:

  • 172 Members of Congress and 34 Senators have signed the Taxpayer Protection Pledge to their constituents and the American people.  It obliges them to oppose any and all net income tax increases 
  • Many of these same elected officials have been seeking to craft a Congressional Republican alternative on health care.  One of the ideas that has been reported is to require Americans to purchase health insurance (an “individual mandate”).  By itself, this proposal is dubious from a liberty perspective, but irrelevant from a tax perspective.  It’s a regulatory cost of government, but not a tax 
  • Any penalty/fine imposed by the government is a tax—an involuntary payment to the government.  This penalty/fine/tax has morphed in recent years to take the form of a surtax on Americans in order to finance this individual mandate.  Americans would pay the surtax on their 1040s, and have the money available to purchase a health insurance plan offered in a government-sponsored “exchange” or “connector,” much like the Massachusetts model. 
  • Because this surtax is a net income tax hike (as evidenced by scores for Senator Wyden’s “Healthy Americans Act”), support for this proposal is inconsistent with the Taxpayer Protection Pledge and a clear Pledge violation.  It should be vigorously-opposed by Pledge signers.


An individual health insurance mandate is bad public policy for several reasons:

  1. Conservatives should never be forcing Americans to purchase an over-priced, over-regulated product under threat of a tax hike
  2. According to the Urban Institute, only 3 percent of all health care spending goes toward uncompensated/uninsured health care—the “free rider” problem is therefore overstated by individual mandate supporters
  3. If Congress requires a mandate, they also must define what constitutes “insurance.”  This will result in disease groups and others lobbying Congress to mandate that their health care spending be made mandatory
  4. Forcing Americans to purchase health insurance doesn’t do anything to lower the cost of insurance.  Indeed, with Congress defining what “insurance” is after being lobbied by Washington, DC interest groups, health insurance will very likely get more expensive, not less
  5. As a result of this higher cost of insurance, Congress will feel pressured to enact more top-down, Washington-focused “solutions” like price controls (already seen in Mass.) and “community rating” (forcing a 25 year old jogger to pay the same premium as a 58 year old chain smoker)
  6. Republicans have plenty of ideas on how to lower the cost of health insurance, which is the real issue here (e.g. small business health plans, health tax credits, HSAs, interstate purchase of insurance, etc.

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ATR Opposes S. 640, the<br> "Second Look at Wasteful Spending Act"


Posted by Ryan Ellis on Tuesday, April 7th, 2009, 5:36 PM PERMALINK


PDF version of this letter
 

April 7, 2009   

The Honorable Judd Gregg
United States Senate
Washington, DC 20510
   
Dear Senator Gregg:
   
I write today very concerned about your recently-introduced S. 640, the “Second Look at Wasteful Spending Act 0f 2009.”  This bill, which is co-sponsored by Senator Joe Lieberman (D-Conn.), lays the groundwork for annual and automatic tax hikes.

Your bill provides for expedited Congressional consideration of Presidentially-submitted rescission packages.  Rather than limiting this to wasteful spending measures and earmarks, however, S. 640 also provides for expedited consideration of “targeted tax benefits.”  Raising taxes grows the size of government.  Cutting spending shrinks the size of government.  They are two mutually-incompatible actions, and cannot be considered equivalent in any way.

Even worse, your bill’s definition of a “targeted tax benefit” could be used to include virtually any tax exclusion, adjustment, deduction, or credit.  It is defined as:

(A) any revenue provision that has the practical effect of providing more favorable tax treatment to a particular taxpayer or limited group of taxpayers when compared with other similarly situated taxpayers; or
   
(B) any Federal tax provision which provides one beneficiary temporary or permanent transition relief from a change to the Internal Revenue Code of 1986
   
What’s concerning is the term, “limited group of taxpayers.”  There is no definition here, and Congress and/or the President is presumably free to make this unfortunate group as large or as small as they like, depending on how much they want to raise taxes that year.

Aren’t health savings account owners “limited?”  How about homeowners?  Families with children?  Small business entrepreneurs?  Investors?  The list is endless, and a “limited group” can be large or small, depending on the mood of politicians at any one time.

S. 640 is an unwise and imprudent bill.  It’s a spending Trojan Horse which contains within it annual tax hikes and growth in government.

   
Sincerely,
Grover G. Norquist

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The Federal Income Tax Is<br> Already Steeply Progressive


Posted by Ryan Ellis on Monday, April 6th, 2009, 11:53 AM PERMALINK


As tax day approaches, here are some facts you might not hear from the politicians in Washington about the current progressivity of the income tax:

  • The top 1% of households (those earning more than $389,000 per year) earn 22% of America’s income, but pay 40% of America’s income tax.  This is up from 26% in 1986 and 37% in 2000
  • The top 5% of households (those earning more than $154,000 per year) earn 37% of America’s income, but pay 60% of America’s income tax.  This is up from 43% in 1986 and 56% in 2000
  • The top 10% of households (those earning more than $109,000 per year) earn 47% of America’s income, but pay over 70% of America’s income tax.  This is up from 55% in 1986 and 67% in 2000
  • Meanwhile, the lower half of income earners (those earning less than $32,000) pay only 3% of income taxes.  This is down from over 6% in 1986 and 4% in 2000
  • The story these numbers tell is of an income tax system which is steeply progressive, and has gotten more so over time—not less

To read the full report, click here

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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
 

PDF of this release

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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


 

PDF version of this letter


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


PDF version

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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.

PDF version of this legislative alert

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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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