Tell the Senate
to Make the
Click Here to Sign the Petition Before It's Too Late.

Ryan Ellis

Obama Calls for Higher Tax Rates on Small Employers Than on Giant, Multi-National Corporations

Posted by Ryan Ellis on Tuesday, July 30th, 2013, 2:04 PM PERMALINK

In a speech today, President Obama will call on Congress to cut the corporate tax rate to 28 percent, and pay for it by eliminating some tax preferences for companies.  While this may appear like a good thing, it's actually part of a larger pattern of this president siding with giant, well-funded companies with DC lobbyists instead of Main Street small employers.

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 2 million of them are corporations.  These businesses tend to be the largest companies in the world.

Even a 28 percent 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 Canada, Mexico, the United Kingdom, or Germany.  The new rate would still be higher than the developed nation average of 25 percent.

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 just raised their tax rate in two pieces.  The first is when he allowed the fiscal cliff to happen, which raised the top income tax rate from 35 to 39.6 percent.  The second is when he imposed a uniform small business tax for Medicare of 3.8 percent on successful companies.  Taken together, this means that most employers face a top rate of close to 44 percent, plus state taxes.

Why does President Obama want to cut tax rates for giant, multi-national corporations, but was content to raise them on Main Street small employers?  It's a good question, but this is now part of a pattern.  Earlier in July, President Obama announced that he was giving large employers a one-year reprieve from Obamacare's employer mandate.  However, small employers and families would still have to face the individual mandate on schedule in 2014.  Again and again, this president sides with big business against small employers.

The bottom line?  President Obama thinks it's a good idea for multi-national, giant corporations to pay a 28 percent tax rate while Main Street small employers pay a 44 percent rate.  That's not fair, and it's not tax reform.

More from Americans for Tax Reform

Top Comments

ATR Supports S. 1085, the "Small Business Tax Certainty and Growth Act of 2013"

Posted by Ryan Ellis on Thursday, July 18th, 2013, 3:00 PM PERMALINK

Earlier this year, Senator Susan Collins (R-Maine) introduced S. 1085, the "Small Business Tax Certainty and Growth Act of 2013."  It is very pro-small employer, pro-growth legislation, and all senators should consider becoming co-sponsors.

In particular, the bill is to be commended for moving toward a permanent expansion of small business expensing and an extension of 50% bonus depreciation.

Under the post-fiscal cliff deal, small business expensing ("Section 179 expensing") was expanded for 2013 only.  S. 1085 would make an expanded small business expensing regime permanent.  Under the bill, a business could annually expense up to $800.000 in new business equipment purchases (indexed for inflation in future years). 

Additionally, the post-fiscal cliff bill allowed all businesses (not just smaller ones) to expense up to half of all business purchases in 2013, subjecting the rest to depreciation.  This allowance would be extended for one year under S. 1085.

Absent an expensing policy, medium-sized and larger businesses are required to slowly-deduct ("depreciate") the cost of these assets over several years.  For example, a computer must be deducted slowly over a five-year period.  Some assets, like buildings, have to be depreciated over periods as long as 40 years.

This should not be.  All purchases should be treated equally.  If a business purchases a box of paper clips, it can be written off the first year.  But if it purchases a desk, it takes seven years to recover the cost.  This distorts business decisions by changing the tax treatment of purchases.  In addition, denying a full deduction for capital expenditures serves to bias the tax code away from investment and in favor of consumption.  The tax code should treat all decisions equally.  A deduction delayed is a deduction denied, especially when inflation is a factor.

S. 1085 goes a long way toward correcting this imbalance, and points in the right direction on how tax reform should also treat business purchases.

More from Americans for Tax Reform

Top Comments

ATR Supports New Taxpayer Bill of Rights

Posted by Ryan Ellis on Monday, July 15th, 2013, 4:09 PM PERMALINK

Congressman Peter Roskam (R-Ill.) has introduced a series of bills that would level the playing field between the IRS and ordinary taxpayers.  Together, they would revolutionize the relationship that everyday citizens have with their government.  ATR is supportive of each of these legislative initiatives, and would urge co-sponsorship of them. 

The family of bills includes:

H. Res. 280, the "Taxpayer Bill of Rights Resolution of 2013."  This resolution sets out basic principles that everyone of good will should be able to get behind: taxpayers have a right to be informed, to be assisted, to be heard, to appeal, to have certainty, to have a basic right to privacy, to confidentiality, to fair representation, to a fair and just tax system, and to pay no more than the correct amount of tax. 

H.R. 2530, the "Taxpayer Transparency and Efficient Audit Act."  This bill ensures that taxpayers are in timely and substantial contact with the IRS during an audit, and importantly ends any unresolved audit open for a full year.

H.R. 2531, the "Protecting Taxpayers from Intrusive IRS Requests Act."  This gets to the heart of the "BOLO crisis," where the IRS targeted Tea Party groups and others on the Right for heightened non-profit application scrutiny.  The IRS would no longer normally be able to ask non-profit applicants questions regarding their religious, political, or social beliefs.

H.R. 2532, the "Integrity Restoration Strategy (IRS) Act."  Building on what H.R. 2531 does, this bill would give the IRS 30 days to investigate a non-profit application, otherwise the application is automatically approved.  The IRS would have one year from passage of the bill to comply with inspector general audit recommendations, and would have to file quarterly reports to the Congress demonstrating that they've cleaned up their ways.

H.R. 2533, the "Stop Playing on Citizen's Cash (SPOCC) Act.  The IRS would be prohibited from holding any more taxpayer funded conferences (including those featuring Star Trek reenactments) until their inspector general and Congress has determined that the IRS can be trusted again to do so.

More from Americans for Tax Reform

Top Comments

Conservatives Support Obamacare Mandate Delay

Posted by Ryan Ellis on Monday, July 15th, 2013, 3:38 PM PERMALINK

The following joint letter was sent today by 17 prominent free market groups supporting House efforts this week to delay Obamacare's employer and individual mandates.  Here's a PDF of the letter.  The content and signers are below:

We, the undersigned organizations and individuals stand united in our support for a delay in Obamacare’s employer mandate and individual mandate.

On July 2, 2013, the Obama Administration announced a one-year delay in the employer mandate.  Changing any statute's effective date is in the purview of the U.S. Congress, not the Executive Branch.  While it is highly questionable whether the Obama Administration has the legal authority to delay the employer mandate, their admission that the Obamacare law is unworkable is all too accurate.

Unfortunately, this accommodation was provided only for Big Businesses.  We believe that individuals, small businesses, and families deserve at least the same reprieve from Obamacare’s costly mandates.  If the employer mandate can be delayed a year, so can (and should) the individual mandate, which adversely affects individuals, families and small business owners.

That’s why we’re supportive of efforts this week in the House of Representatives to delay for one year both the employer and individual mandates.

We view this effort as not only a matter of basic fairness, but part and parcel of our larger efforts to defund and repeal Obamacare.  We support full Obamacare repeal and full de-funding of Obamacare, as well as the mandate delay efforts the House is undertaking this week.



Grover Norquist, Americans for Tax Reform

Dean Clancy, Freedom Works

Heather Higgins, Independent Women’s Voice

Jenny Beth Martin, Tea Party Patriots

Amy Kremer, Tea Party Express

Duane Parde, National Taxpayers Union

Grace-Marie Turner, Galen Institute

Phil Kerpen, American Commitment

John Tate, Campaign for Liberty

Jim Martin, 60 Plus Association

Colin Hanna, Let Freedom Ring

Penny Nance, Concerned Women for America

George Landrith, Frontiers of Freedom

Ken Hoagland, Restore America’s Voice

Kathryn Serkes, Doctor-Patient Medical Association

Christopher Wright, Obamacare Truth Squad

Chris Prandoni, Alliance for Worker Freedom

Alexandria Tea Party

Brian Baker, Ending Spending

Dr. Juliette Madrigal-Dersch, American Association of Physicians and Surgeons

More from Americans for Tax Reform

Top Comments

ATR Supports "Blank Slate" Tax Reform Approach If No Net Tax Hike, Consumption Base

Posted by Ryan Ellis on Wednesday, July 10th, 2013, 1:21 PM PERMALINK

Americans for Tax Reform sent the following letter to Senator Orrin Hatch (R-Utah) today expressing measured support for the "blank slate" approach to tax reform.  The full letter can be found here.  Below is an excerpt:

A revenue-neutral reform target is an absolutely essential precondition to any tax reform plan.  Tax reform should not be a stalking horse for a net tax increase.  Any tax reform plan should bring in no more tax revenue than the current system is projected to collect.  Any additional tax revenues should come as a result of faster economic growth from reform, not from legislated tax increases.  This was a key element of the 1986 Tax Reform Act.  219 congressmen and 39 senators have made this commitment to their constituents—in writing—before standing for election.  The Taxpayer Protection Pledge facilitates real, sustainable tax reform.

A comprehensive income tax base is the wrong starting point.  This income tax base double-taxes savings, biases in favor of debt over equity financing, and unfortunately is the starting point for the effort you’re undertaking here.  A more reasonable tax base to use would be one that taxes all consumed income once and only once.  The choice of tax base is absolutely critical to whether a tax reform plan maximizes economic growth or not.

More from Americans for Tax Reform

Top Comments

ATR Supports the "Small Business Investment Promotion Act"

Posted by Ryan Ellis on Wednesday, June 26th, 2013, 1:04 PM PERMALINK

ATR is proud to support a new bill by Senator Jeff Flake, the "Small Business Investment Promotion Act."  We urge all senators to support and co-sponsor this pro-growth, pro-jobs, pro-taxpayer legislation.

The bill increases the dollar amount of business assets that a small employer may expense (as opposed to depreciate) under Section 179 of the I.R.C.  Under the bill, businesses may expense up to $250,000 in business tangible personal property, with a phaseout starting at $800,000 of such property purchased in a year.  These dollar amounts would be indexed to inflation.  Computer software and certain real property would also be eligible for 179 expensing on a permanent basis.

This is a huge improvement over current law.  If Congress does nothing, the amount of property that can be expensed will fall to just $25,000 in 2014 and onward. 

Any property not immediately-expensed under Section 179 would be subject to complex depreciation rules.  For example, if a business purchased a computer for $1000, under depreciation that entire cost cannot be subtracted from the business' taxable income in the year of purchase.  Rather, it would be subject to partial deductions each year until the full cost was recovered (in the case of a computer, this takes--in effect--six calendar years, longer than the life of any computer). 

Not only is depreciation a needless complexity in our tax system--it involves the tax system in picking winners and losers.  A company can write off the full cost of hiring a new employee, the full cost of going on a business trip, the full cost of buying a box of staples--but not the full cost of buying a computer under depreciation rules.  That distorts business decisions for non-business reasons.

The "Small Business Investment Promotion Act" gets small- and mid-sized firms out of this trap.  By allowing the first $250,000 of business tangible personal property to be expensed, family-owned and operated employers can recover the cost of new business fixed investment in year one.  Ideally, all businesses of any size should be able to fully expense property, but this is a good first start.

More from Americans for Tax Reform

Top Comments

ATR Supports H.R. 2009, the "Keep the IRS Off Your Health Care Act of 2013"

Posted by Ryan Ellis on Thursday, June 20th, 2013, 3:04 PM PERMALINK

ATR is pleased to announce its support for H.R.. 2009, the "Keep the IRS Off Your Health Care Act of 2013."  The bill is sponsored by medical doctor and Congressman Tom Price (R-Ga.)  We would urge all Congressmen to co-sponsor and support the bill.

GAO has reported that there are 47 new powers the IRS has acquired under the Obamacare law.  We here at ATR have pointed out time and again the 20 new or higher taxes that are contained in Obamacare.  With a new scandal coming out of the IRS seemingly every day, the last thing that agency should be doing is snooping into the personal health care lives of over 300 million Americans.

Yet that's just what the IRS is about to do.  They will be the agency tasked with implementing the individual mandate and the employer mandate.  They will force all of us to disclose our personal health identification information to them when we file our 1040s every April.  They will be talking to our insurance companies and the Department of Health and Human Services about our health insurance packages. 

This is outrageous.  The IRS should have nothing to do with our health care.  Passage of H.R.. 2009 would ensure that the agency which gave us Star Trek videos and Tea Party harassment keeps its hands off our health care.

More from Americans for Tax Reform

Top Comments

ATR Supports the "Death Tax Repeal Act of 2013"

Posted by Ryan Ellis on Tuesday, June 18th, 2013, 4:56 PM PERMALINK

Americans for Tax Reform today sent the following letter to Senator John Thune (R-S.D.) and Congressman Kevin Brady (R-Tex.) in support of their new legislation, the "Death Tax Repeal Act of 2013":

The death tax is unfair.  It’s not fair to tax savings twice or even three times, as the death tax does.  It’s not fair to tax (again and again) the life work of a job creator, putting all he built and helped at risk.  And it’s certainly not fair to impose a top death tax rate as high as 40 percent, as our current system does.

The death tax is unpopular.  There are now nearly two decades of public opinion polls which show public support for full and immediate death tax repeal at between 70 and 80 percent.  The time has come to end the death tax.

The death tax is a jobs killer.  According to research from the Tax Foundation’s Steve Entin, killing the death tax would result in $1 trillion of higher economic growth over the next decade.  Small employers have to spend billions of dollars per year to plan around the death tax.  How many hundreds of thousands of Americans are out of work because of the mere existence of this tax?

The death tax is an immoral tax on small employers and families.  Imposing a tax rate as high as 40 percent on savings is not just bad for the economy—it’s unfair to families that have scrimped, saved, and built job-creating small businesses in their local communities.  Families should not have to visit the undertaker and the local IRS office at the same time.

The death tax is easier to repeal than ever.  According to CBO, the death tax will collect about $20 billion per year over the next decade.  That’s less than one-half of one percent of all federal tax revenues collected in that period.  Surely we can cut spending or find a tax revenue offset which does far less damage to jobs than the death tax does.


More from Americans for Tax Reform

Top Comments

IRS Obamacare Power of the Day: Community Organizer Subsidy

Posted by Ryan Ellis on Tuesday, June 18th, 2013, 12:46 PM PERMALINK

Throughout the summer, Americans for Tax Reform will be highlighting the most outrageous new powers that the IRS will have under the Obamacare law.  According to a report from GAO, the IRS is tasked with nearly four dozen new powers under that law.  Each day, one will be selected for a brief review.

The Obamacare law provides for “walking around money” payments to ACORN-like community organizers to sign people up for Obamacare (and likely to vote).

More from Americans for Tax Reform

Top Comments

IRS Obamacare Power of the Day: Nosey Uncle Sam

Posted by Ryan Ellis on Friday, June 14th, 2013, 9:26 AM PERMALINK

Throughout the summer, Americans for Tax Reform will be highlighting the most outrageous new powers that the IRS will have under the Obamacare law.  According to a report from GAO, the IRS is tasked with nearly four dozen new powers under that law.  Each day, one will be selected for a brief review.

Obamacare says that the IRS and HHS must share personal health ID information about every American participating in Obamacare.

More from Americans for Tax Reform

Top Comments