CEOs Warn Congress of 'Grave Consequences' in Taxmageddon
Today a letter was sent to the President and members of Congress by 15 CEOs from some of the largest financial institutions in the U.S. The 15 CEOs who signed the letter represent the Financial Services Forum, a non-partisan organization that deals specifically with financial and economic policy. In the letter, they urged for the avoidance of the coming Taxmageddon, and warn of the dire effects that inaction would have on the economy.
“The consequences of inaction—for stability in global financial markets, for economic growth, for millions of Americans still without work, and for the financial circumstances of American businesses and households—would be very grave" - CEOs' letter to Congress.
References are made in the letter regarding what credible institutions have said concerning Taxmageddon, including the Federal Reserve’s warning that Taxmageddon would cause a recession “and about 1.25 million fewer jobs would be created in 2013.” Moody’s potential downgrade of the U.S. over fiscal negotiations is also mentioned and the downgrade's negative effect on interest rates and global markets.
The fragile state of the economy (due in large part to Obama's failed economic policies) is a big concern for CEOs who said:
“at a time when economic growth is less than 2 percent, and with nearly 25 million Americans either out of work or underemployed, the still-fragile U.S. economy cannot sustain—and the American people do not deserve—the impact of more gridlock in Washington.”
For more information on how Taxmageddon will affect your family’s budget click here.
California: The Golden State With Some Not So Golden Measures
It’s not November yet, but changes are already happening in California. Last month, Governor Jerry Brown (D) signed a number of bills into law that will negatively impact the Golden State economy.
Most notable and problematic is Senate Bill 1234, dubbed the California Secure Choice Retirement Savings Trust Act. For workers without an employer-sponsored retirement plan, this new law will require 2-5% of their wages to be automatically set aside for California bureaucrats to manage in a state-sponsored IRA. This new law will place the savings of seven million eligible employees under state government control. The Wall Street Journal’s Allysia Finley, a California native, explains what the state would then do with the siphoned wages:
"They essentially want to give it to this Retirement Board that's comprised of mainly politicians in Sacramento and their union allies. And they would supposedly invest the money for the first three years in treasuries and other 'safe investments.' And then they could distribute the money essentially to their politically-favored causes' investments."-Allysia Finley.
Workers can technically opt-out of making contributions to a state-run IRA, but as Finley notes, “it’s a very onerous process,” just like it is for public employees who want to opt out of paying dues.
In a recent Forbes article, Chuck DeVore, a former California legislator and current Vice President of National Initiatives at Texas Public Policy Foundation, explained the motive behind this odious new law:
“Why are the weakest government pension systems seeking to force private sector workers to pay into their accounts? There are four reasons: the infusion of new cash can help the balance sheets; millions of additional voters will be made more dependent on government programs; those same voters will be invested in ensuring that state-run pension systems are adequately funded; and the political appointees and politicians who oversee those retirement systems will have billions more in investment leverage to pressure corporations to bend to their progressive demands.”
Not all of the bills signed into law by Gov. Brown last month are bad. Senate Bill 443, for instance, is a bipartisan-supported measure that requires a conviction before police can claim civil asset forfeitures. In the past, police officers could claim an individual’s assets without a conviction.
“This important legislation will drastically reduce the opportunity for police to take money from and otherwise harass poor people, immigrants, people of color, and small businesses that work primarily in cash,” said Lynne Lyman, California state director of the Drug Policy Alliance.
In less than two weeks, California voters have some important decisions to make that will influence everything from their tax returns to their trips to the grocery store. The Americans for Tax Reform 2016 Ballot Guide, released this week, highlights the noteworthy measures on the 2016 ballot that will have the greatest impact on California taxpayers and the state economy:
Notable Tax-Related Ballot Measures
California Proposition 67, Plastic Bag Ban Veto Referendum
Americans for Tax Reform Stance: Oppose
Proposition 67, if approved by voters, would uphold a 2014 state law banning the use of plastic bags and charging consumers a 10 cent on every paper bag used at checkout. All revenue collected from this bag tax would go to grocery stores, not state government coffers.
Prop. 67’s approval would result in a multi-million dollar tax increase on consumers that will do nothing to improve the environment but will transfer income from low and middle-income households to the bank accounts of large corporations.
California Proposition 65, Dedication of Revenue from Disposable Bag Sales to Wildlife Conservation Fund
Americans for Tax Reform Stance: Support
Proposition 65 is an initiative statute to Proposition 67 that would direct all bag tax revenue away from grocery stores, as current law stipulates, and instead towards the Environmental Protection and Enhancement Fund, a new fund that would be managed by Wildlife Conservation Board.
Americans for Tax Reform opposes California’s plastic bag ban and paper bag tax. Yet if Prop. 67 is approved and the paper bag tax remains on the books, revenue raised by it should go to public coffers instead of private companies. As such, ATR opposes Prop. 67, while supporting Prop. 65.
California Proposition 55, Extension of the Proposition 30 Income Tax Increase
Americans for Tax Reform Stance: Oppose
Proposition 55 would extend the higher temporary income tax rates approved by voters in 2012 on incomes exceeding $250,000 a year. If this measure is approved, the higher income tax rates will remain in place through 2030. However, if voters reject Prop. 55, these tax increases will begin phasing out in 2018.
Currently, California’s top marginal income tax ranks highest in the nation at 13.3 percent. Second highest in the nation, Oregon, is more than 3 percentage points lower. Keeping such a high rate in place for a longer period of time will continue to hamstring the state economically and will be particularly harmful to small businesses owners who pay their taxes on their individual income tax return.
California Tobacco Tax Increase, Proposition 56
Americans for Tax Reform Stance: Oppose
Proposition 56 would increase the state cigarette tax by $2.00 per pack, resulting in a total cigarette tax of $2.87 per pack. This increase would be equivalently applied to other tobacco products as well.
In that vein, Prop 56 would also expand the state definition of “other tobacco products” to include e-cigarettes, which would hold these innovative, safer alternatives to traditional cigarettes to the taxes outlined in Proposition 99 and Proposition 10.
Local Tax-Related Ballot Measures
San Diego, California Football Stadium Initiative, Measure C
Americans for Tax Reform Stance: Oppose
Measure C would raise the city’s hotel room tax to finance the construction of a new stadium for the San Diego Chargers, and additional convention center space.
Currently, the city’s hotel room tax is 10.5 percent, which is collected with an additional 2 percentage point surcharge to fund the Tourism Marketing District for an effective total hotel tax of 12.5 percent. Measure C would lower the Tourism Marketing District down to 1 percent, however, the overall effective rate would still increase to 16.5 percent. Approval of Measure C would result in a nearly 60 percent increase in the San Diego hotel tax.
Numerous Local Soda Tax Ballot Measures
Americans for Tax Reform Stance: Oppose
Voters in San Francisco & Oakland, CA, as well as Boulder, CO will face ballot questions asking them to approve punitive tax hikes on soda.
Simply put, discriminatory soda tax hikes are regressive cash grabs that will do nothing to improve public health.
One of the few times Senator Bernie Sanders (I-VT) has ever been correct about any fiscal policy issue was when he pointed out on the presidential campaign trail this year that soda tax hikes are “fairly regressive. And that is, it will be increasing taxes on low-income and working people.”
Significant Local Ballot Measure
Monterey County Ban on Fracking and Extreme Oil Extraction Methods Initiative
Americans for Tax Reform Stance: Oppose
This initiative would ban hydraulic fracturing in Monterey County, California.
Banning energy extraction methods such as hydraulic fracturing prevents the development of affordable, cleaner, reliable, and abundant natural gas. Furthermore, banning hydraulic fracturing will cause Monterey County to forgo economic growth and job-creation.
ATR Supports H.R. 6246, the Retirement Inflation Protection Act of 2016
Americans for Tax Reform sent a letter today supporting H.R. 6246, the Retirement Inflation Protection Act of 2016. Conservatives have consistently championed lowering or outright repealing the capital gains tax. The House GOP has spearheaded this effort with a proposal to reduce the top rate to 16.5 percent. On the other hand, presidential candidate Hillary Clinton wants to increase the capital gains tax.
H.R. 6246 protects seniors from inflation-induced capital gains taxes, which would be even higher under a Clinton presidency. The IRS puts seniors at a disadvantage because it does not distinguish between value gained from government-created inflation and the real gains made from an asset. As a result, seniors often pay more in capital gains taxes than they should be. The Retirement Inflation Protection Act of 2016 would fix this discrepancy by indexing capital gains for inflation.
This bill is a major step towards lowering capital gains taxes and ensuring that the American people are not exploited by the IRS. Ideally, taxes on capital gains for everyone should be lowered or repealed. ATR fully supports H.R. 6246. See the letter here or below.
October 28, 2016
The Honorable Tom Emmer
United States House of Representatives
503 Cannon House Office Building
Washington, D.C. 20515
Dear Congressman Emmer,
I write in support of H.R. 6246, the Retirement Inflation Protection Act of 2016, legislation that will index the capital gains tax to inflation for Americans over the age of 59.5 years. All Members of Congress should support this important, pro-taxpayer legislation.
If an investor purchases a stock for $100, and later sells that same stock for $400, he must report and pay taxes on a $300 capital gain. However, some of that gain is merely due to the effects of inflation over the years. In many cases, much or all of a capital gain is merely inflation. With an historical inflation rate of 3%, inflation halves the real value of all assets every 24 years. While this is bad enough, it adds insult to injury to have to pay taxes merely on inflated gains.
The Retirement Inflation Act will fix this problem for seniors by indexing capital gains taxes to inflation for those aged 59.5 and above, the same age that you can begin withdrawing from retirement accounts. The legislation does so by multiplying the adjusted basis of the asset by the GDP deflator -- the change in inflation that took place while the asset was held.
Because the IRS does not account for differences between government-created inflationary value and the real value of a capital gain, it does not represent the true capital gains that one would receive while holding the asset.
This important piece of legislation will ensure that seniors can better be financially self-sufficient. After decades of accumulating assets, they should not be penalized on the gains from long-term investments.
In the perfect world, capital gains taxes should be adjusted for inflation for everyone. Americans who choose to invest wisely should not be punished for the profits they make. Capital gains taxes are taxes on income that has already been subject to the income tax and therefore discourages investment.
Passage of the Retirement Inflation Protection Act will ensure that the smart investments made by seniors are not eroded through inflation. All members of Congress should have no hesitation supporting and co-sponsoring this important legislation.
Grover G. Norquist
President, Americans for Tax Reform
Report: Hillary’s State Department Spent $79,000 On Obama Books
$79,000 of taxpayer money was used to buy copies of Barack Obama's books during Hillary Clinton’s tenure in the State Department.
Hillary Clinton's State Department used millions of taxpayer dollars for frivolous expenses and odd, non-State Department essential items such as $630,000 to increase Facebook "likes" on State Department pages and $450,000 to send three comedians to India on a tour called "Make Chai Not War."
These findings were published today in a 21 page in-depth report by the Republican National Committee that is based on findings from the State Department's Office of Inspector General (OIG). The OIG issued two Management Alerts relating to the State Department's oversight of contracts and grants during Secretary Clinton's tenure.
The OIG reported over $600 million de-facto waste in their reports. The RNC did a random sample analysis of State Department's line item expenditures and they identified over $9 million in expenses that were seen as extremely frivolous and excessive.
Why did the State Department, under Hillary Clinton's lead, spent so much taxpayer money on ridiculous items that are obviously not necessary? One can only guess for reasons why the State Department would need to spent $79,000 on books written by Barrack Obama. At an average of $15 per book that’s more than 5,000 (five thousand!) books. The State Department library must be overflowing.
Or why the Clinton State Department decided that it was good use of taxpayer’s money to spent $5,400,000 on a no-bid contract for crystal stemware. Perhaps to drink the 32 bottles of wine from for which they paid $4,837.
Donald Trump mentioned during the third debate that under Clinton’s tenure $6 billion went missing since 2008. This was most likely based on a memo from the OIG in 2014 where they found that:
“Specifically, over the past 6 years, OIG has identified Department of State (Department) contracts with a total value of more than $6 billion in which contract files were incomplete or could not be located at all.”
Funnily enough Hillary said these claims were debunked (they are not). This new report by the RNC ads more proof to the mountain hill of evidence that the State Department wasted millions of taxpayer dollars under Hillary Clinton’s tenure.
Imagine what kind of shopping she would do as president.
Vote Yes on New Jersey Public Question 2
Americans for Tax Reform Urges New Jersey Taxpayers to Vote Yes on Public Question 2
Americans for Tax Reform, a non-profit taxpayer advocacy organization founded in 1985 at the request of Ronald Reagan, announced today it is urging New Jersey voters to support Public Question 2, a ballot measure whose fate will be determined on November 8.
Public Question 2, if approved by voters, would dedicate all state gas tax revenue to the New Jersey Transportation Trust Fund. Under current law only 10.5 cents of the 13.5 cent per gallon gas tax is dedicated to the transportation fund.
Diversion of gas tax revenue to non-transportation purposes is a problem in many states. Approval of Question 2 by New Jersey voters will implement a taxpayer safeguard ensuring that gas tax revenue goes toward building and maintaining roads, as opposed to being diverted to non-transportation purposes. Approval of Question 2 would also alleviate pressure to raise gas taxes in the future. Similar transportation funding safeguards are in place in both Maryland and Wisconsin.
“The legislation that abolished the state death tax, cuts the state sales tax and reduces income taxes on retired New Jersey voters as well as increasing the gas tax is overall a net tax cut over the next ten years. That is a victory for taxpayers,” said Grover Norquist, president of Americans for Tax Reform.
“But another victory is that finally New Jersey taxpayers will be protected from politicians stealing from gas tax revenues and spending them on politics as usual. If New Jersey passed Public Question 2 that protects our gas tax monies from politicians looking to fund special interests. Limiting gas taxes to building roads and transportation projects is giant step in reducing corruption in New Jersey,” said Norquist.
How the Clintons Cheated on Their “Used Underwear” Tax Return
Hillary and Bill Clinton’s decades-long pattern of dishonesty shows up in their tax returns
A new review of Hillary and Bill Clinton’s previous tax returns show the Clintons blatantly overvalued their non-cash donations and illegally reduced their tax burden. They didn’t pay the taxes they owed.
Hillary and Bill Clinton famously donated Bill’s used underwear and took a $2 per-pair tax deduction on their 1986 tax return. In Bill’s own handwriting, here is the line from the 1986 Clinton tax return, claiming a $6 deduction for “3 pr. underwear”:
Most press reports have focused on the strangeness of the used underwear donation and tax deduction. But the new examination of handwritten notes reveals the Clintons cheated on their taxes by significantly overstating the value of their donated clothing. These are not simple rounding errors of a few percentage points: The Clintons overstated the value of their used clothing by a factor of several hundred percent.
And not just the underwear, but many items of clothing including suits, pants, and sports coats.
When the Washington Post investigated the matter in 1993, they hit a brick wall when trying to get an explanation. The White House “over the course of a week didn’t respond to repeated phone calls seeking answers.”
To this day, the Clintons have not answered questions about their overvaluing of non-cash donations, and Hillary Clinton’s campaign website does not make available her tax returns for the years in question.
Let’s review the case against the Clintons, starting with the judgement question of donating used underwear (likely briefs) and having the gall to take a tax deduction for it. As noted by the Washington Post:
“Several experts were consulted about Clinton's tax-deductible donations, especially of underwear. Paul Offenbacher, a longtime Washington-area tax accountant, said it is highly unusual to take an itemized deduction on donated underwear; indeed, he had never heard of such a thing.”
The Washington Post also talked to one of the recipient organizations:
"We don't get too much underwear here; I don't think people want that too much," said Joe Cheslow, a senior resident at the Union Rescue Mission, a haven for homeless people in Little Rock, Ark., that has been a frequent beneficiary of the Clintons' tax-deductible largess.
This author obtained handwritten notes of the Clinton’s donation lists to the Salvation Army and Goodwill Industries. Over the years the Clintons consistently overvalued donated items, by as much as 10 times the IRS standard.
The IRS allows deductions for non-cash donations to charity, but taxpayers must value the items truthfully. For tax year 1986, that meant using the “Thrift Shop Value” of items (the same basic standard applies to this day) as noted in IRS instructions.
The Clinton’s 1986 tax returns include a handwritten list showing they declared the value of a “gabardine suit – ripped pants” at $75, the "Brown Sports coat" at $100 and the “Salmon Sports coat” at $75. And of course the famous "3pr. underwear" at $6.
Pictured below: Bill Clinton’s handwritten list of non-cash donations to the Salvation Army for tax year 1986.
Using any calculation method, the Clintons were dishonest:
-Goodwill Industries and Salvation Army both publish guides for valuing used clothing donations. In 2016 dollars, Goodwill Industries values men's suits at $10 - $30, and sports coats at $6 - $12. There is no listing for men’s used underwear.
-The Salvation Army values suits at $15 - $60. There is no listing for men’s used underwear.
-The TurboTax “ItsDeductible” calculator values items based on a combination of eBay and thrift store prices. Men’s suits are valued at $29, sports coats at $18. Underwear is listed, but at just $1.
Basically what the Clintons did is akin to walking into a Goodwill store today, donating a sports coat and deducting $220 dollar from your taxes for it. Or donating a pair of used underwear and deducting $4.40.
Below are ten of the worst valuations found on multiple handwritten notes from the Clinton’s tax return for a single tax year, 1986:
Just this selection of 10 overvaluations adds up to $1,375 - $1,518 in 2016 dollars.
“Hillary and Bill Clinton clearly overstated the fair market value of the clothing donated,” said Ryan Ellis, an IRS Enrolled Agent and noted tax policy expert.
What are the consequences to a normal American of grossly overvaluing donations in the manner of the Clintons?
“If a taxpayer overstates a deduction like this, they could be held liable under audit by the IRS for back taxes, interest, and a failure-to-pay penalty,” said Ellis.
Hillary Clinton has been preaching for ‘fairness’ and ‘paying what you owe’ on the campaign trail. Her own estate is specifically designed to shield herself from the Death Tax.
The embarrassing incident of the used underwear tax deduction seems to have masked the more serious issue of blatant overvaluation that happened on a consistent basis. Perhaps this is why the Clintons refuse to answer questions about their dishonesty on these tax returns.
“Hillary and Bill Clinton didn’t pay the taxes they owed. The press has focused only on the giggle factor of the underwear, but fail to mention the Clintons broke the law,” said Grover Norquist, president of Americans for Tax Reform. “Meanwhile, Hillary has pushed a national gun tax, a soda tax, a payroll tax hike on middle income households, a Death Tax hike, a capital gains tax hike and several other tax hikes totaling $1.4 trillion over a decade.”
Americans for Tax Reform is tracking the complete Clinton tax record at www.HighTaxHillary.com
Congress Should Not Use the Tax Code to Pick Winners and Losers in the Reinsurance Industry
Congressman Richard Neal (D-MA) and Senator Mark Warner (D-VA) recently introduced legislation (H.R. 6270 and S. 3424 respectively) that needlessly picks winners and losers in the reinsurance industry by distorting the tax code in an economically destructive way. While supporters of the legislation claim it would close a “loophole” in the tax code, it would do no such thing and would instead make the code more complex, while decreasing choice and increasing prices in the reinsurance industry.
Property and casualty insurers commonly purchase reinsurance as a way to spread risk so that no single insurer is overly exposed in the face of disaster. Under federal law, insurers are permitted to deduct from taxable income any premiums paid to a reinsurance provider. This makes perfect sense because it is a necessary business expense indistinguishable from any other.
The proposed legislation removes this business deduction only for foreign reinsurers based on the argument that foreign firms are using the deduction to shift profit outside the U.S.
But this is argument misses the mark -- profit shifting concerns are not justified here. Reinsurance transactions are already heavily regulated to ensure the rules aren’t abused. Even if this were the case, the solution should not be to treat identical business purchases differently under the tax code based on the location of the reinsurer.
Not only is this proposal protectionist, but it would make the code more complex, would arbitrarily picks winners and losers, and hurts the economy and consumers. Given it raises a miniscule amount of revenue, it is not a serious pay-for especially after accounting for the economic damage it causes.
Doesn’t Fix the Problem that Supporters Claim: Supporters of this proposal argue that reinsurance profits ending up outside the U.S. means that insurers are shifting profit to minimize taxes. This is not the case. By its nature, reinsurance is an industry that spreads risk across the globe, therefore profit (and loss) will naturally spread outside U.S. borders. In addition, reinsurance transactions are already subject to heavy scrutiny by IRS auditors to ensure they do not abuse discrepancies in international tax law to shift profit outside the country.
Makes the Tax Code More Complex: Tax policy should treat all economic decisions neutrally by minimizing the number of distorting credits and deductions in the code so that decisions are made based on economic growth. Current law over reinsurance premiums already treats business decisions equally, so H.R. 6270/S. 3424 would create more complexity in the code and encourage insurers to arbitrarily treat purchases differently based on the country of purchase.
Reduces Consumer Choice and Increases Reinsurance Prices: Changing the tax code in this way will distort the reinsurance market by giving domestic reinsurers an artificial advantage. This will narrow the choices available to insurance companies and consumers leading to decreased competition and higher prices. According to research by the Brattle Group, this proposal could reduce the supply of reinsurance by as much as 20 percent, and increase costs to American consumers by $11 to $13 billion due to higher prices.
Hurts Economic Growth: According to research by the Tax Foundation, this change would reduce GDP by $1.35 billion over the long term, due to increases in the cost of capital. As noted by the study, every additional dollar in revenue would come at the cost of more than four dollars to the economy. Equal treatment of foreign and domestic reinsurance allows consumers to spread the risk in an economically efficient way, but the proposed change creates unneeded market distortions.
Raises a Miniscule Amount of Revenue: Congress is continually on the hunt for “pay-fors” as a way to offset tax reform proposals. Because this proposal is so damaging to economic growth, it would raise a miniscule amount of revenue and is essentially useless as a tax reform pay-for. After accounting for negative economic feedback, the proposal would raise just $4.4 billion over a ten-year period. Over that same period, federal revenues will total $41.7 trillion according to the Congressional Budget Office. The damage this proposal will cause to the economy and to property and casualty insurers far outweighs any benefit it may have as a tax reform pay-for.
CMMI Tests Undermine Congressional Authority and Threaten Access to Healthcare
Obamacare created the Centers for Medicare and Medicaid Innovation (CMMI), an agency tasked with conducting demonstrations over new health care delivery and payment models in Medicare, Medicaid, and the Children’s Health Insurance Program with the intent of reducing healthcare costs. While the goals of this agency are laudable, CMMI is using its broad authority to marginalize the constitutional role of Congress in order to push bad healthcare policy.
CMMI tests are supposed to increase the efficiency of healthcare programs by either improving quality without increasing spending or reducing spending without decreasing quality. However, the agency has pushed tests with little evidence they will result in savings, while strong-arming providers into participating.
The last eight years have seen the executive branch repeatedly push unilaterally actions that ignore the will of Congress and the American people. The actions of CMMI to unilaterally propose changes in law represents a new avenue for unelected bureaucrats to push their liberal agenda even in the face of opposition from doctors, patients, and Congress.
Lawmakers must assert their constitutional authority over this wayward agency. The fact is, it is the job of Congress to make these changes to law.
CMMI Not Subject to Congressional Oversight: Federal agencies are typically funded through the annual appropriations process, which gives Congress control over funds each year and the opportunity to conduct oversight over the actions of an agency.
CMMI is not subject to this process – the agency has been obligated $10 billion this decade and $10 billion every decade in perpetuity. As a result, the agency has free rein to do what it wants with these funds and Congress is limited as to the oversight it can conduct over the agency.
To date, CMMI has spent more than $6 billion with no savings to show for it. In the real world, the agency’s poor performance would see its funds reduced. Instead, CMMI continues to receive funds automatically.
CBO Methodology Hampers CMMI Oversight: The Congressional Budget Office is the scorekeeper for Congress on all fiscal issues. It provides cost estimates on all legislation and is therefore an integral part of the budget making process. In measuring the fiscal cost/benefit of CMMI demonstrations, CBO is adjusting the trillion dollar federal baseline even though it is unclear whether there will be any savings at all.
The agency assumes that tests are recouping billions in savings as if they are successful even though these tests are in their early stages, and little, if any evidence has been compiled. Conversely, CBO is scoring any attempt to block or correct demos as costing the government money. This binds the hands of lawmakers by them to consider offsetting spending cuts whenever they wish to exert proper oversight over .
Not only does this decision distort the federal baseline with misleading estimates, it makes it much harder for Congress to do its job by giving CMMI tests supremacy over the work done by lawmakers.
CMMI is Promoting Bad Healthcare Policy: Because of its broad authority over mandatory spending, CMMI has been able to propose sweeping policy changes with little evidence of future savings. The latest CMMI test proposes a new, lower payment model for physician-administered prescription drugs under Part B of Medicare.
Because CMMI has decided it can mandate participation in its tests, the rule rewrites existing payment models for as much as 75 percent of the country forcing thousands of doctors and patients across the country to participate. Because the rule drastically reduces reimbursement rates to doctors, it is likely that these tests will hurt access to care for seniors across the country.
This massive test should be subject to careful scrutiny, especially as there are concerns that the demonstration will not save the money that CMMI claims. However, Congress is hamstrung in its ability to conduct meaningful oversight because of CBO methodology.
Norquist: Pennsylvania House Needs to Pass Asset Forfeiture Reform This Year
On Friday, Americans for Tax Reform President Grover Norquist co-authored an opinion editorial for PennLive with Faith and Freedom Coalition Executive Director Timothy Head and Freedom Works CEO and President Adam Brandon on why Pennsylvania needs civil asset forfeiture reform in 2016.
The article emphasizes PA Senate’s recent vote to pass asset forfeiture reform in its house to “improve property rights across the state.” Now, it is up to the House Judiciary Committee to get the bill through the legislature before this session ends in November.
Civil asset forfeiture, the process where law enforcement officials can seize property from citizens who have not been criminally convicted, has been significantly abused in Pennsylvania. Recently, the state’s Attorney General, Kathleen Kane, admitted to seizing $1.77 million in cash using civil asset forfeiture laws to profit off the seizures. On this issue, the article states:
“The money is very good in the forfeiture business – if you happen to work for the government. So good, in fact, that it becomes easy to lose track of it.
A current case in point involves now-disgraced Pennsylvania Attorney General Kathleen Kane, who only recently admitted to seizing $1.77 million in cash using civil asset forfeiture laws.
As questions grew louder, the circumstances involving the cash – that had been sitting in boxes in her office for nearly two years – came to light.”
Millions of dollars sat in Kane’s office for two years, and there was no significant mechanism to check this seizure.
In the Institute for Justice’s Policing for Profit report released last November, Pennsylvania received a D- for its poor protections of innocent property owners, low bar for police to seize property, lack of conviction required to take property, and harmful use of profit with 100% of forfeiture proceeds going to law enforcement.
Pennsylvanians deserve to be treated better by law enforcement officials. That is why Americans for Tax Reform supports the current civil asset forfeiture reform bill in the state’s House of Representatives that passed the State Senate 43-7.
Please read and share Norquist’s article (found here) on these necessary measures to restore Pennsylvanian property rights before the 2016 legislative session ends.
30 Years Is Too Long Since Tax Reform
Thirty years ago today, President Ronald Reagan signed into law the Tax Reform Act of 1986– which became the largest simplification of the U.S. Tax code in history. Prior to 1986, the federal tax code was a complex mess of brackets, deductions, and credits totaling over 26,300 pages.
Some of the laws major achievements were:
- The reduction of the top marginal individual income tax rate from 50 percent to 28 percent
- A reduction of the corporate income tax rate from 46 percent to 34 percent
- Reducing the total number of income brackets from 14 to 2
While Reagan achieved a significant victory with his reforms, they did not far outlive his presidency. Starting with President H.W. Bush, the top marginal tax rate was raised from 28 percent to 31 percent. President Clinton took it a step further raising the top rate to 39.6 percent. After a brief stint at 35 percent under President George W. Bush, President Obama returned the rate to 39.6 percent.
It has been thirty years too long. Our tax code desperately needs reform.
The Tax Code is Too Complex
Since 1955, the federal tax code has increased six-fold, from 409,000 words to 2.4 million words. Countless regulations have increased the tax burden on Americans and it’s time that time and money are spent doing what you want to do, not working to comply with the government. According to the Tax Foundation, Americans will spend 8.9 billion hours and $409 billion complying with IRS tax filing requirements this year. U.S. businesses and individual income tax returns make up the majority of the hours spent complying, clocking in at 2.8 billion hours and 2.6 billion hours respectively. It’s too complex and it’s too long.
The Tax Code is Uncompetitive
The tax code is the worst in the world. The U.S corporate tax rate is 39 percent, whereas the global average is 25 percent. The tax rate has barely changed since 1986 and since then, other countries have cut their rates aggressively. The U.S. rate is two to three times higher than its direct competitors, like Canada (26.3 percent), the U.K. (20 percent), and Ireland (12.5 percent).
Additionally, the U.S. is only one of six OECD countries that still utilizes a worldwide system of taxation. American businesses overseas are required to pay taxes in the country it earned the income in and then pay U.S. taxes on the remaining income, essentially double-taxing American businesses. This system of double taxation puts American businesses at an immense disadvantage, as they are competing with businesses who utilize the more modern territorial system of taxation. Ultimately, the costs of the worldwide system of taxation are passed onto employees, as much as 75 percent of the costs can be passed onto workers.
Congress Must Again Pass Pro-Growth Tax Reform
Pro-growth tax reform that cuts rates for all need not be viewed as costing the government money. As noted by the Congressional Budget Office, every 0.1 percent of higher economic growth equates to $286 billion in extra federal revenue, meaning an increase from 2 percent average growth to 3 percent growth would have economic benefits and would help resolve the government’s overspending problem.
House Republicans in their “Better Way” blueprint have introduced ways to simplify the puzzling tax code and fix our competitiveness problem. To simplify the code, House Republicans have proposed a way so that taxpayers can file their taxes on as little as a postcard. To fix, House Republicans suggest reducing the U.S. corporate rate to 20 percent, which is lower than the global average, and creating a territorial system of taxation. A 20 percent rate, like the blueprint calls for would create more than 600,000 full time jobs and increase GDP by more than 3 percent over the long term. If passed into law, these solutions will make American’s lives easier and ensure that our businesses can again compete in the global economy.