Ryan Ellis

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.

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IRS Obamacare Power of the Day: Profit Cap

Posted by Ryan Ellis on Wednesday, June 12th, 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 puts a price control on how much money health care companies can make.  This will result in rationing of health care for all of us.

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IRS Obamacare Power of the Day: Equal Outcomes Matter

Posted by Ryan Ellis on Monday, June 10th, 2013, 9:53 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.

IRS Obamacare Power #1: Equal Outcomes Matter

Obamacare requires that everyone in a workforce have the same “quality” health coverage as everyone else. 

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Anyone Still Think the IRS Should Prepare Your Tax Return?

Posted by Ryan Ellis on Monday, May 13th, 2013, 10:07 AM PERMALINK

One of the perennial canards that float around Washington, DC is that "life would be so much better if the IRS prepared most people's tax returns."  Every April 15th, you can count on multiple mainstream media stories parroting this Beltway truism (this year, NPR and the left-wing Pro Publica, among others, paid the annual homage).  This money-grab is pushed by innocuous sounding liberal organizations like the "Sunlight Foundation."

It's all a ruse to hide their real agenda: collecting more tax dollars for the government by forcing taxpayers to fight City Hall if they want to disagree with the IRS-prepared return.

ATR swats down these stories every spring.  We point out, among other things:

IRS tax return preparation invites a conflict of interest.  The IRS' job is to collect tax revenues, and measures success or failure on this basis.  To let the IRS also determine the liability of tax is a clear conflict of interest.

IRS tax return preparation is a solution in search of a problem.  Since 2003, sixteen private sector tax software providers have voluntarily banded together to provide free tax preparation services to low- and moderate-income families with simple tax situations.  70 percent of all taxpayers—more than 100 million families—have access to this voluntary, private sector initiative.  To date, 37 million tax returns have been processed by Free File, saving taxpayers $129 million in administrative costs.

The IRS can't handle preparing people's taxes.  The IRS is a hulking and bumbling bureaucracy that routinely loses paperwork, takes months to process inquiries, and makes wasteful Star Trek videos. 

They are tasked with implementing no fewer than 47 different Obamacare provisions, including 20 new or higher taxes.  They are going to ask intrusive information about your personal health identification information starting next year.

Now, we have found out that they are guilty of a conspiracy to disenfranchise Tea Party and other limited government conservatives by preventing them from forming 501(c)(4) organizations.

Are these the people you want doing your taxes?


If you don't want the IRS to be preparing your taxes next year, like us on Facebook or Tweet this article to your friends.

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Every Conservative Fiscal Group Opposes "Chained CPI" Tax Hike

Posted by Ryan Ellis on Friday, April 26th, 2013, 3:08 PM PERMALINK

The following letter was sent today to Capitol Hill:

(Full letter PDF)

Dear Congressmen:

On behalf of the undersigned organizations, we write today to express strong concerns about the tax revenue component of the so-called “Chained CPI” proposal.

Changing the way the government measures inflation has both spending cut and tax increase effects.  This letter strictly speaks to the latter.  It’s important to note that Chained CPI can be restricted to just the spending side of the federal budget.

Chained CPI would, among other things, slow down the growth rate of individual income tax brackets.  Over time, American families and small employers will find themselves facing a higher marginal income tax rate than they would absent the change to Chained CPI.  Additionally, other tax provisions such as IRA and 401(k) contribution eligibility, etc. would grow more slowly if Chained CPI were adopted.   In its first decade of implementation, President Obama’s FY 2014 budget projects Chained CPI would raise taxes by $100 billion.

We are not opposed to Chained CPI under any circumstances.  In the context of bracket-flattening tax reform which is revenue-neutral or a net tax cut, Chained CPI may be an acceptable component.  But as a standalone tax measure, Chained CPI is a $100 billion tax increase in the first decade alone.

For these reasons, we oppose Chained CPI as a standalone tax policy measure because of the fact that it is a $100 billion tax increase on the American people.


Grover Norquist, Americans for Tax Reform
Andy Roth, Club for Growth
Mike Needham, Heritage Action for America
James Valvo, Americans for Prosperity
Wayne Brough, Freedom Works
Duane Pardee, National Taxpayers Union
Phil Kerpen, American Commitment
Jim Martin, 60 Plus Association


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Conservatives Support Repeal of Obamacare Slush Fund

Posted by Ryan Ellis, John Kartch on Wednesday, April 24th, 2013, 11:52 AM PERMALINK

The House is voting today on H.R. 1549, the “Helping Sick Americans Now Act.” This legislation enjoys broad support across the conservative movement, including from those organizations most active in Obamacare repeal efforts.

Independent Women’s Voice organized a coalition letter of twenty-one conservative organizations and leaders who support H.R. 1549, including Americans for Tax Reform, National Taxpayers Union, FreedomWorks, Let Freedom Ring, Tea Party Nation, Richard Viguerie, and Grace-Marie Turner.

H.R. 1549 defunds an ACORN-style slush fund in Obamacare controlled by HHS Secretary Kathleen Sebelius, and uses that money to enroll the sickest Americans in health insurance plans.

The full text of the letter and list of signatories is below:


Dear Leader Cantor and Congressman Pitts,

We want to thank you for drafting, and offering to call up in the House, a bill that allows

Members to choose between continuing to have part of the so-called Affordable Care Act fund

lobbyists, activist organizations, and ad campaigns to raise taxes and restrict freedom, as it is

presently doing, or redirecting some of those funds to make insurance more affordable for

Americans with pre-existing conditions, while reducing overall spending. That’s the decision

the House will face when it considers your H.R. 1549, the Helping Sick Americans Now Act. It

should be an easy choice.


We fully support repealing – and short of that fully defunding – ObamaCare, and in a perfect

world that is what we’d have already done and would do again tomorrow. Collectively, we

represent millions of Americans who recognize the harm ObamaCare will do to medical choice,

access, and affordability, and know there are far better ways to improve health care. As long as

we face the reality of this President and a Senate controlled by Democrats, we recognize that

repeal will take time. We work every day to build awareness of the false promises and real harms

of this dreadful law, and support for defunding, de-authorizing and ultimately repealing it. As

we work toward repeal, we want to ensure that we protect innocent Americans from the worst

aspects of the law, and mitigate the law’s damage to our country.


That’s why we support the Helping Sick Americans Now Act. It would redirect money that’s

currently being used to implement some of the worst aspects of the existing law to the Pre-

Existing Condition Insurance Plan, or PCIP, a federal high-risk pool insurance program that

helps provide coverage for those with pre-existing conditions, but which the Administration

closed to new enrollees earlier this year due to funding constraints. The bill takes $4 billion from

an Obamacare slush fund and reallocates part of it to helping sick people the President has

turned his back on. The remainder, about $1 billion, goes to deficit reduction. To be clear: this

bill defunds Obamacare.


The American people need to hear about the failure and hypocrisy of this Administration, and

the Helping Sick Americans Now Act will help to get this message out. First, the Administration

sold ObamaCare as a vehicle for helping those with pre-existing conditions, but knowingly

poorly designed and underfunded the primary program serving that most vulnerable group.

Once the consequences of that under-funding became clear, instead of reallocating existing

slush funds to support it, they shut the door to the program on an estimated 40,000 sick

Americans, causing real hardship for many Americans who currently have no better alternatives.


This didn’t have to happen. Secretary Kathleen Sebelius has the authority under the Patient

Protection and Affordable Care Act (PPACA) to transfer money from the so-called Prevention

and Public Health Fund (“Prevention Fund,” or “Slush Fund”) to the PCIP. But she has

knowingly refused to take this simple, compassionate step, because politics takes preference

over the people this Administration no longer needs to pretend to care about. H.R. 1549 would

therefore require HHS to transfer approximately $4 billion in FY 2013-2016 funding from the

Prevention and Public Health Fund to PCIP. This would allow CMS to enroll sick Americans

who have been denied coverage because of the Administration’s decision.


In addition to prioritizing sick Americans, H.R. 1549 would also eliminate four years of funding

from the Prevention and Public Health Fund, one of ObamaCare’s worst programs, which is rife

with waste and abuse. For example, the “Prevention” fund has financed pet neutering

campaigns, bike/park signs, and gardening, and more disturbingly lobbying campaign – in some

cases directly funding lobbyists in violations of federal law – to enact fast food construction

moratoriums and soda taxes (included polling to test messages for higher soda taxes).


Reallocating the Prevention and Public Health Fund resources would at least be a more

constructive use of funds rather than pouring more money down into the bottomless maw of an

unworkable bill. If this funding is not reallocated to PCIP then it will continue to go to

implementing ObamaCare. In fact, the Administration has tapped $54 million from the

Prevention Fund to pay individuals and community groups to sign people up for ObamaCare

exchanges (and simultaneously check if they are registered to vote). Just last week, the

Administration announced that it plans to use $304 million for enrollment and advertising

campaigns for Obamacare. The Prevention Fund is one of the last sources the Administration

has to use for 2014 implementation of its $1 trillion “train wreck” of an exchange program.


H.R. 1549 would also make the PCIP function better by eliminating the rule that requires

already sick individuals to go without coverage for six months in order to gain eligibility for the

program. While PCIP could be improved further, and should in fact be replaced with smarter

programs, it makes sense to prioritize funding for vulnerable Americans over slush funds for the

remainder of 2013. Preliminary estimates also show that H.R. 1549 will reduce the deficit by

approximately $1 billion.


This bill represents the first opportunity that our congressional allies and we have had, since the

health care law's enactment three years ago, to show what we are for – and whom we are for –

and not just what we are against.


Of all the bills considered in the House to date, to repeal, defund, or dismantle ObamaCare, this

bill is the first to point towards the kinds of market-oriented reforms that most conservatives

would replace ObamaCare with. If enacted, the bill would help to slow down the law's

implementation, a significant achievement. The simple act of debating the bill will give

conservatives the opportunity to highlight all that’s wrong with ObamaCare, and with the

Administration's misuse of funds and callous attitude toward those with pre-existing conditions.


The bill is a win-win for conservatives and the American people. The law's implementation is

already chaotic – in the words of Senator Baucus, a “train wreck.” This bill will make it harder

for the Administration's engineers to get that destructive train back on track.


Even after this bill has been debated and sent to the Senate, we will continue to fight for

full repeal – this year. Three years of ObamaCare is enough. We must end this law before

January 1st, when it is scheduled to take full effect. We appreciate your leadership on this

important issue, and look forward to working with you as we continue toward our shared

mission of repealing ObamaCare – while creating a better health care system that benefits all

Americans – this year.




Heather Higgins, Independent Women’s Voice

Phil Kerpen, American Commitment

Dean Clancy, FreedomWorks

Ryan Ellis, Americans for Tax Reform

Grace-Marie Turner, co-author, Why ObamaCare is Wrong for America

Pete Sepp, National Taxpayers Union

Colin Hanna, Let Freedom Ring

Richard Viguerie, ConservativeHQ.com

Judson Phillips, Tea Party Nation

Jim Backlin, Christian Coalition of America

Jim Martin, 60 Plus

Jim Capretta

Ken Hoagland, Restore America’s Voice Foundation

Dee Hodges, Maryland Taxpayers Association

Randy Kendrick

Seton Motley, Less Government

C. Preston Noell III, Tradition, Family, Property, Inc.

Amy Ridenour, National Center for Public Policy Research

Alex St. James, Republican National Policy Committee

Wes Vernon, columnist

Daniel Weber, Association of Mature American Citizens

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ATR Supports H.R. 1549, the "Helping Sick Americans Now Act"

Posted by Ryan Ellis on Friday, April 19th, 2013, 3:04 PM PERMALINK

Next week, the U.S. House will consider H.R. 1549, the "Helping Sick Americans Now Act."  This bill would defund an Obamacare political slush fund controlled by HHS Secretary Kathleen Sebelius and instead use the money to give the sickest Americans health insurance.  ATR is supportive of this legislation, and would encourage all Congressmen to vote for it.

H.R. 1549 would take four years of funding from Obamacare's "Prevention and Public Health Fund" and re-deploy the money to a high risk pool.  This slush fund has turned into a political grab bag of patronage and bribery in its short life.  So far, taxpayer dollars have been used for pet neutering campaigns, bike/park signs, gardening, fast food construction moratorium lobbying, polling to test messaging for higher soda taxes, as well as working with the Centers for Disease Control to lobby for higher "sin" taxes across the board.

Even more importantly, this slush fund is the source of funding for advertising Obamacare exchanges.  $354 million will be used to advertise to American families that they must comply with an individual mandate they didn't ask for and don't want.  H.R. 1549 would put a stop to that.

What does the bill use the slush fund money for instead?  First, it returns over $1 billion to the Treasury to achieve deficit reduction.  Second, it uses the balance of the fund to support a high risk pool, a mechanism where people too sick to get insurance on the open market can become qualified to do so.  Not only is this a much better use of the money (after all, a healthcare law should be spending money on healthcare, not lobbyists and ad men), it has a long history of GOP support.  High risk pool funding has been in every conservative health policy reform plan for a generation.  One might quibble about the details of this particular high risk pool fund, but not with the overall policy goal's durable pedigree.

Next week, Members of the U.S. House will have a simple choice: do you think money is better spent on lobbyists and PR firms, or is it better spent on sick people?

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Simpson-Bowles 3.0 Is a Giant Tax Hike on Families and Small Employers

Posted by Ryan Ellis on Friday, April 19th, 2013, 1:40 PM PERMALINK

The third version of the "Simpson-Bowles" plan was released this morning.  Below are some preliminary observations:

The plan raises taxes by $739 billion, but isn't honest about it.  The Simpson-Bowles plan headline report says it only raises taxes by $585 billion over a decade by eliminating or limiting tax deductions and credits (beyond what is needed to lower rates).  But there is much more to the story.

"Chained CPI" tax hike included.  However, the plan also calls for "Chained CPI," which the President's FY 2014 budget says raises taxes by another $100 billion over the decade, and this plan's Figure 21 (buried deep in the appendix) says will raise taxes by $124 billion. 

Secret IRS audit slush fund.  There's a third hidden tax increase, again only to be found buried in Figure 21.  This is "program integrity," which is a polite euphemism for creating a fishing expedition audit slush fund for the IRS.  This is expected to raise another $30 billion by 2023.

Put it all together, and the plan raises taxes by $739 billion over the next decade.

In addition, the plan improperly counts interest savings derived from tax increases as spending cuts.  For ratio purposes, these should be properly-allocated to the tax side of the ledger.

The plan has a 2:1 ratio of spending cuts to tax increases.  When properly-allocated, the Simpson-Bowles plan cuts about $2 in spending for every $1 in tax increases.  That might sound "balanced," except that it comes on the heels of the tax increases already forced on Americans by President Obama in the fiscal cliff (later reduced by Congress).  It also happens to be the same "Lucy and the football" ratio from the 1990 "Read My Lips" Andrews Air Force Base deal that cost President George H.W. Bush a second term.

Simpson-Bowles 3.0 would raise tax revenues to 19.7 percent of the economy by 2023.  Under current law, 2023 revenues are projected to be 19.1 percent of economic output.  Note that this is already far higher than the historical average level of tax revenues (18 percent of the economy).  Not content with being a full percentage point higher than the historical average, Simpson-Bowles wants even more.  In the future, taxes would rise even higher as the effects of Chained CPI and the "Step 4" tax hikes take effect (more on that below).

"Tax reform" proposal would create an inferior tax system to the current one.  There is a plan for "tax reform" in the Simpson-Bowles plan, but it really isn't much of a reform.  The whole idea behind tax reform is to collect the same amount of money as today, but in a smarter way--that's what the 1986 Tax Reform Act was all about, or at least tried to be.  Real tax reform is revenue-neutral, not a stalking horse for higher taxes.

This plan increases taxes by over $700 billion, and hopes you don't notice because rates come down.

Even within this faux-reform, there's a lot of bad policy

  • Depreciation lives are extended when we should be moving toward full business expensing.  All business inputs should be deducted from the tax base in the year of purchase.
  • The top rate of 28 percent for corporations is still too high.  When state corporate rates are factored in, there's still an international-comparison rate of over 32 percent.  That leaves the United States' marginal rate higher than all but a very small handful of our competitors.  France, Japan, and Belgium would all have higher rates than the U.S. under this plan.  However, all the other OECD countries would retain their rate advantage.  This is particularly-damaging when it comes to major trade partners like Germany, the United Kingdom, Canada, and Mexico.
  • There's a new 401(k)/IRA cap of $20,000.  If anything, these accounts should be completely-uncapped to reduce the double taxation of savings and investment.
  • Capital gains and dividends would see a tax rate hike from 23.8 percent today to 28 percent under the plan.  That moves in the wrong direction--the proper tax rate for this income is 0 percent, since it already faced taxation at the corporate level
  • Step-up basis for capital gains is removed.  This is particularly-bad, since the plan fails to repeal the death tax.  The whole point of step-up basis is that the death tax has captured the inter-generational transfer already.  It's just another layer of tax on savings.

The tax reform plan does do a few good things: it moves toward a territorial system, repeals the AMT, and rates are reduced somewhat to a top rate of 28 percent.  But on balance, the tax reform plan would probably be a net negative compared to current law.  Any tax reform plan which increases the cost of capital this much--even with a rate reduction--is deeply-flawed.  And the fact that it's fake tax reform because it simply masks a giant tax hike makes it truly unserious.

"Step Four" tax hikes could be even worse.  All of the tax hikes described above are just the first stage of new tax hikes in the Simpson-Bowles plan.  There's also a shadowy "Step Four" which calls for even deeper tax increases to "fix" the entitlement crisis (which, let's not forget, is a spending problem).  Step Four gives a menu of options, but there are some tax increases in that menu, including:

  • Increasing the Social Security taxable wage base to 90 percent of wages and pegging this to wage growth
  • Enrolling people currently lucky enough not to be paying into Social Security today
  • Taxation of employer-provided health insurance benefits as wages
  • An increase in the federal gas tax of $0.11 or $0.12 per gallon

Obamacare is left completely untouched.  Interestingly, the plan doesn't call for any substantial changes to be made to Obamacare.  This is despite the fact that Obamacare will cost trillions of dollars in new federal spending over the next few decades, and Senator Max Baucus (D-Mont.) recently called its implementation a "train wreck."

A more serious plan has already passed the U.S. House of Representatives three times.  The budget written by Congressman Paul Ryan (R-Wisc.) has passed the House three times.  The Ryan budget does not raise taxes a time, reforms the tax system the right way, repeals Obamacare, and reduces the debt/GDP ratio far more than any version of Simpson-Bowles ever has.

The Simpson-Bowles plan was brought to a vote on the House floor and it failed miserably.  When an earlier version of this plan was voted on by the House, it only managed to garner 28 votes.  That means almost 94 percent of the House did not support it.  Unlike the Ryan budget, it has no hope of passage and will never achieve any political success.

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Top Ten Tax Hikes in the Obama Budget

Posted by Ryan Ellis on Wednesday, April 10th, 2013, 1:09 PM PERMALINK

There are literally dozens of new tax increases in the FY 2014 Obama budget.  In total, they increase taxes by nearly $1 trillion over the next decade.  They would permanently bring the federal tax burden to 20 percent of economic output, a level only reached in one year since World War II (FY 2000, when the economy was roaring and tax revenues were pouring into Washington as a result).

Below are the top ten tax increases in President Obama's budget (all numbers are over a decade):

1. Chained CPI.  The budget would change the definition of inflation for all federal budget purposes, including federal tax provisions.  Because tax brackets and other tax items are indexed to inflation, slowing down their growth is an income tax increase.  This is a tax increase for all Americans who pay income tax, including middle class Americans.  In the past, Congress' Joint Committee on Taxation has estimated that enacted "chained CPI" would be a $100 billion tax increase

2. Itemized deduction cap.  The Obama budget limits the maximum value of itemized deductions, like those for charitable donations and mortgage interest. This is an income tax increase.  No matter what tax bracket you are in, under this Obama provision you can't benefit any more than if you were in the 28 percent bracket.  There are three tax brackets higher than this: 33 percent, 35 percent, and 39.6 percent.  These families will not be able to fully deduct things like mortgage interest, charitable deductions, and state taxes paid.  Note that this is on top of the phaseout of itemized deductions ("Pease") that President Obama forced on taxpayers in the fiscal cliff.  Tax increase: $529 billion

3. Death tax hike.  The Obama budget would raise the death tax rate from 40 percent today to 45 percent.  It would also reduce the inflation-indexed death tax "standard deduction" from $10.3 million today for married couples (half that for singles) to $3.5 million with no inflation adjustment.  There are also other death tax increases of a more technical nature.  Tax increase: $79 billion

4. "Buffett rule."  The President's budget would impose a new "Buffett rule" on taxpayers whose adjusted gross income exceeds $1 million.  These taxpayers would have to face an average tax rate (that is, their tax bill divided by their income less charitable contributions) of 30 percent.  Tax increase: $53 billion

5. Tobacco tax hike.  The President's budget nearly doubles the tobacco tax, from $1.01 to $1.95 per pack, and then indexes it to inflation from there.  This is a clear tax hike on middle class Americans.  According to independent estimates, the average smoker in America makes about $40,000 per year.  Additionally, tobacco taxes are a declining tax revenue base, and as a result it's inappropriate to fund new government programs using it. This isn't the first time President Obama has raised federal tobacco taxes. In 2009, on his sixteenth day in office, he signed into law a 156 percent increase in the tobacco tax.  Such tax increases are a violation of Obama's central campaign promise not to sign "any form of tax increase" on Americans making less than $250,000 per year. Tax increase: $78 billion

6. IRA and 401(k) plan restrictions.  There are two new tax increases on IRA and 401(k) savers in the President's budget.  The first restricts the total account balance in ALL tax preferred IRAs and 401(k)s to a combined $3 million.  The second would require that non-spouse beneficiaries of IRAs and 401(k)s distribute all money within five years, rather than over their lifetime.  Additionally, the budget forces all employers with 10 or more employees to open payroll-deduction IRAs at work.  Tax increase: $14 billion

7. "Carried interest" capital gains tax hike.  Under current law, capital gains are taxed at rates lower than ordinary income to reflect the double taxation of investment capital, risk, and other factors.  The current top capital gains tax rate is about 24 percent.  Some capital gains are received by managing partners of investment partnerships.  These capital gains are known as "carried interest."  Despite the fact that these capital gains are no different than capital gains anywhere else (and are the same source of capital gains that the limited partners in such arrangements receive), the President's budget taxes these capital gains at ordinary income tax rates, which are nearly 45 percent on an all-in basis.  Tax increase: $16 billion

8. Energy tax hikes.  There are energy tax hikes littered throughout the budget.  Taken together, these tax increases will have one effect and one effect only: higher prices for consumers at the gas pump and in their utility bills.  Tax increase: $94 billion

9. Tax increases on international income.  The U.S. is one of the only developed nations that taxes the income of U.S. companies and individuals which are earned overseas (so-called "worldwide taxation").  In so doing, we potentially expose this money to taxation in two different countries on the same earnings.  The Obama budget increases the liklihood that this double taxation will occur by removing protections against it.  Ideally, the U.S. would only seek to tax income earned within the United States, a system known as "territoriality."  Tax increase: $158 billion

10. Financial system tax increases.  These, too, are littered throughout the budget.  They would impose taxes on banks, brokerage firms, life insurance companies, and virtually every other way that the middle class saves and invests.  These costs will be passed along in the form of higher fees, bigger commissions, and lower returns to shareholders.  Tax increase: $94 billion

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ATR Supports Thune Amendment to Senate Budget to Kill Death Tax

Posted by Ryan Ellis on Friday, March 22nd, 2013, 2:36 PM PERMALINK

Senator John Thune (R-S.D.) will today offer an amendment (#307) to the Senate budget resolution.  This amendment would create a deficit neutral reserve fund to fully and permanently repeal the death tax.  ATR is supportive of this amendment and urges all senators to vote for it.

The death tax was permanently changed after the fiscal cliff.  The top death tax rate is 40 percent.  There is a death tax "standard deduction" of $10.3 million (indexed to inflation) for a married couple, half that for singles. 

While these levels exempt most Americans from having to pay the death tax, those who do face this liability spend billions of dollars every year paying lawyers, accountants, actuaries, and life insurers to plan tax avoidance strategies.  This sunk cost means less capital available to create jobs and grow the economy.

According to Reagan economist Steve Entin of the Tax Foundation, repealing the death tax would grow the economy by $1 trillion over the next decade and yield the U.S. Treasury an additional $150 billion in tax revenue due solely to economic growth. 

Repealing the death tax is relatively-easy from a budget perspective.  According to the Congressional Budget Office, the death tax will yield $200 billion in tax revenue over the next decade, less than one-half of one percent of all federal tax revenues.  This level is less than one-tenth of one percent of all economic output.  Repealing this destructive tax in a deficit-neutral and revenue-neutral way is not one of Washington, DC's greater policy challenges.

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