Davis-Bacon Act Undermines Democrats' Stimulus Bill
While many have criticized the Democrat-passed “stimulus bill” for its expediency, or lack thereof, and its inevitable waste, inherent in massive spending, it is rare that the two deficiencies cross paths in one magnificent example of government irrationality. Democrats justified hastily passage of the recovery bill through the “we are on the precipice of a recession” fear mongering; that inaction would prove disastrous.
A recent release from the Government Accountability Office suggests that urgency is supplanted by waste in the hierarchy of stimulative requirements. Stimulus funds that were allocated to the Weatherization Assistance Program remain unspent, heaven forbid, due to questions about construction workers wages which are determined by the arcane Davis-Bacon legislation, a depression-era bill that, in practice, is a wage subsidy for workers contracted by the federal government.
Davis-Bacon makes it illegal for the federal government to award contracts to companies unless they pay wages determined by a government body, the Wage and Hour Division. The Wage and hour Division uses the imprecise method of surveying to calculative wage rates- audits have found a 100% error rate when comparing the Wage and Hour Divisions’ calculations to a statistical analysis of an areas wages. Usually, Davis-Bacon inflates wages for construction jobs raising the price tag for such projects.
Davis-Bacon drives up costs and adds red tape. This is not new news but is counter to the Democrats' rational for the stimulus. Instead of employing workers queued up for jobs, Democrats are spending time and money calculating prevailing wages in areas where the Weatherization Assistance Program will be implemented. In the real world, contracts are awarded to companies who offer their services for the lowest price and can accomplish the given task effectively. How logical. The federal government should embrace this common methodology and throw Davis-Bacon’s unscientific wage rates out the window. Unfortunately for Democrats, two of their favorite bills, the Stimulus, a bill predicated on speed, and Davis-Bacon, an old bureaucratic arrangement, are incompatible, with one undermining the other.
Repeal of Obamacare Will Provide Much Needed Middle Class Tax Relief
At today’s Senate Finance Committee hearing for Tom Price to be Secretary of Health and Human Services, Sen. Claire McCaskill (D-Mo.) falsely claimed that repealing Obamacare’s 20 new or higher taxes would benefit “the rich.”
As further evidence of how ignorant Sen. McCaskill is about the contents of the law,Obamacare imposed roughly one trillion dollars ($1,000,000,000,000) in higher taxes over ten years that directly and indirectly hit middle class families and businesses.
The law imposes a tax for failing to buy government-mandated insurance, imposes taxes on the millions of Americans using Health Savings Accounts and Flexible Spending Accounts, imposes an income tax hike on Americans facing high medical bills, imposes a new tax on health insurance, a tax on medical devices, a tax on employer provided care, and a tax on innovative medicines and other treatments.
Repealing these taxes will provide much needed relief to the paychecks of families across the country. Repealing Obamacare will also undo Barack Obama’s broken promise not to sign “any form of tax increase” on any middle class American family.
Individual Mandate Non-Compliance Tax ($43.3 billion tax hike between 2016-2025)
Anyone not buying “qualifying” health insurance – as defined by President Obama’s Department of Health and Human Services -- must pay an income surtax to the IRS. In 2014, close to 7.5 million households paid this tax. Most make less than $250,000. The Obama administration uses the Orwellian phrase “shared responsibility payment” to describe this tax.
Starting this year, the tax was a minimum of $695 for individuals, while families of four had to pay a minimum of $2,085.
Households w/ 1 Adult
Households w/ 2 Adults
Households w/ 2 Adults & 2 children
A recent analysis by the Congressional Budget Office (CBO) found that repealing this tax would decrease spending by $311 billion over ten years.
Medicine Cabinet Tax on HSAs and FSAs ($6.7 billion tax hike between 2016-2025)
Since 2011 millions of Americans are no longer able to purchase over-the-counter medicines using pre-tax Flexible Spending Accounts or Health Savings Accounts dollars. Examples include cold, cough, and flu medicine, menstrual cramp relief medication, allergy medicines, and dozens of other common medicine cabinet health items. This tax costs FSA and HSA users $6.7 billion over ten years.
Flexible Spending Account Tax ($32 billion tax hike between 2016-2025)
The 30 - 35 million Americans who use a pre-tax Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs face an Obamacare-imposed cap of $2,500. This tax will hit Americans $32 billion over the next ten years.
Flexible Spending Account Tax ($32 billion tax hike between 2016-2025)
The 30 - 35 million Americans who use a pre-tax Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs face an Obamacare-imposed cap of $2,500. This tax will hit Americans $32 billion over the next ten years.
Before Obamacare, the accounts were unlimited under federal law, though employers were allowed to set a cap. Now, parents looking to sock away extra money to pay for braces find themselves quickly hitting this new cap, meaning they have to pony up some or all of the cost with after-tax dollars. Needless to say, this tax especially impacts middle class families.
There is one group of FSA owners for whom this new cap is particularly cruel and onerous: parents of special needs children. Families with special needs children often use FSAs to pay for special needs education. Tuition rates at special needs schools can run thousands of dollars per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. This Obamacare tax increase limits the options available to these families.
Health Insurance Tax ($130 billion tax hike between 2016-2025)
In addition to mandating the purchase of health insurance through the individual mandate tax, Obamacare directly increases the cost of insurance through the health insurance tax. The tax is projected to cost taxpayers – including those in the middle class – $130 billion over the next decade.
The total revenue this tax collects is set annually by Treasury and is then divided amongst insurers relative to the premiums collected from certain plans each year. While it is directly levied on the industry, the costs of the Obamacare health insurance tax are inevitably passed on to small businesses that provide healthcare to their employees, middle class families through higher premiums, seniors who purchase Medicare advantage coverage, and the poor who rely on Medicaid managed care.
According to the American Action Forum, the Obamacare health insurance tax will increase premiums by up to $5,000 over a decade and will directly impact 1.7 million small businesses, 11 million households that purchase through the individual insurance market and 23 million households covered through their jobs. The tax is also economically destructive – the National Federation for Independent Businesses estimates the tax could cost up to 286,000 in new jobs and cost small businesses $33 billion in lost sales by 2023.
Chronic Care Tax ($35.7 billion tax hike between 2016-2025)
This income tax increase directly targets middle class Americans with high medical bills. The tax hits 10 million households every year. Before Obamacare, Americans facing high medical expenses were allowed an income tax deduction to the extent that those expenses exceeded 7.5 percent of adjusted gross income (AGI). Obamacare now imposes a threshold of 10 percent of AGI. Therefore, Obamacare not only makes it more difficult to claim this deduction, it widens the net of taxable income. This income tax increase will cost Americans $40 billion over the next ten years.
According to the IRS, approximately 10 million families took advantage of this tax deduction each year before Obamacare. Almost all were middle class: The average taxpayer claiming this deduction earned just over $53,000 annually in 2010. ATR estimates that the average income tax increase for the average family claiming this tax benefit is about $200 - $400 per year.
“Cadillac Tax” -- Excise Tax on Comprehensive Health Insurance Plans ($87.3 million tax hike between 2016-2025)
In 2020, a new 40 percent excise tax on employer provided health insurance plans is scheduled to kick in, on plans exceeding $10,200 for individuals and $27,500 for families. According to research by the Kaiser Family Foundation, the Cadillac tax will hit 26 percent of employer provided plans and 42 percent of employer provided plans by 2028. Over time, this will decrease care and increase costs for millions of American families across the country.
HSA Withdrawal Tax Hike ($100 million tax hike between 2016-2025)
This provision increases the tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.
Ten Percent Excise Tax on Indoor Tanning ($800 million tax hike between 2016-2025)
The Obamacare 10 percent tanning tax has wiped out an estimated 10,000 tanning salons, many owned by women. This $800 million Obamacare tax increase was the first to go into effect (July 2010). This petty, burdensome, nanny-state tax affects both the business owner and the end user. Industry estimates show that 30 million Americans visit an indoor tanning facility in a given year, and over 50 percent of salon owners are women. There is no exception granted for those making less than $250,000 meaning it is yet another tax that violates Obama’s “firm pledge” not to raise “any form” of tax on Americans making less than this amount.
Tax Reform Must Retain Carried Interest As A Capital Gain
As President Trump and Congress ramp up discussions on what comprehensive tax reform should look like, they ought to be able to agree that reducing, not raising, the tax burden on badly-needed investment is a top priority. That's the opinion of two of Washington's most prominent taxpayer groups, which today urged leaders on both ends of Pennsylvania Avenue to get an early start on publicly declaring tax-reform principles that encourage investment, among them ensuring that all types of capital gains are treated fairly, without harsh or discriminatory exceptions in the law.
Grover Norquist, Founder and President at Americans for Tax Reform, and Pete Sepp, President of National Taxpayers Union, offered the following statement ahead of GOP's policy retreat, where tax reform is expected to be the topic of in-depth discussions:
"The next four years represents an opportunity to reduce -- not increase taxes on capital gains. Over the past eight years, the top rate increased from 15 percent to 23.8 percent, and the top integrated rate currently sits at 56.3 percent compared to the OECD/BRIC average of 40.3 percent.
While it appears unlikely that incoming lawmakers and the administration will increase rates outright, they should also be sure not to incrementally move the needle toward higher capital gains taxes in other ways, like boosting taxes on carried interest capital gains.
Carried interest capital gains income is earned through a net gain within a partnership formed between individuals with capital and an expert investor. They are indistinguishable from any other type of capital and so they are paid at the same capital gains tax rates.
While supporters of higher taxes on carried interest capital gains say it takes aim at 'hedge fund guys,' it would also hurt pension funds, charities, and colleges that depend on these investment partnerships as part of their savings goals. In addition, small businesses would find themselves increasingly shut out from investment money available to them from these partnerships.
Rather than supporting proposals that lead to higher capital gains tax rates, the incoming Congress and administration should look toward lower rates. One model to follow is contained in the House GOP blueprint, which reduces the top rate on capital gains to 16.5 percent."
ATR is a nonpartisan taxpayer advocacy group, and sponsors the Taxpayer Protection Pledge. NTU is a pro-taxpayer lobbying organization working for lower, simpler taxes and economic freedom at all levels.
ATR Urges Ind. Lawmakers to Reject Cigarette and Gas Tax Hikes
In a recent letter, Americans for Tax Reform urged Indiana lawmakers to reject measures being pushed by Republican House Speaker Brian Bosma that would raise the state gas and cigarette tax.
To: Members of the Indiana Legislature
From: Americans for Tax Reform
Re: 2017 Legislative Session
Dear Members of the Indiana Legislature,
The coming year looks to be one of historic policy change, not just in Washington, but also state capitals across the country. On behalf of Americans for Tax Reform and our supporters across Indiana, I write today to urge you to keep taxpayers in mind as you take up many important issues during the 2017 legislative session. Any and all tax hikes will be scored as violations of the Taxpayer Protection Pledge, a personal written commitment many state lawmakers have made to their constituents to oppose net increases in taxes.
Your constituents have been hit with over 20 federal tax increases over the last eight years. The last thing individuals, families, and employers across Indiana need is to have lawmakers in the Indianapolis pile on with further tax hikes at the state level.
There is ample evidence that higher taxes make states less competitive, and harm economic growth. John Hood, chairman of the John Locke Foundation, a non-partisan think tank, analyzed 681 peer-reviewed academic journal articles dating back to 1990. Most of the studies found that lower levels of taxes and spending correlate with stronger economic performance. When Tax Foundation chief economist William McBride reviewed academic literature going back three decades, he found “the results consistently point to significant negative effects of taxes on economic growth, even after controlling for various other factors such as government spending, business cycle conditions and monetary policy”
Unfortunately, potential tax hikes are already looming in the state and your colleagues are openly endorsing them. Earlier this month, not only did Speaker Bosma publicly tout a $0.10 gas tax hike, he’s supporting a gas tax increase for a second year in a row. The plan, like last year’s bill, only focuses on raising taxes, not reforming government or reallocating currently collected resources. As such, I urge you to reject this misguided approach to budgeting.
If transportation funding were truly a priority, lawmakers would immediately use gas tax revenue for its intended purpose: roads—rather than wait until 2019, as the plan proposes. By claiming a tax hike is needed for transportation, lawmakers are admitting that transportation needs are actually their lowest priority; otherwise they would not have funded everything else first. As such, legislators should immediately and permanently codify the earmarking of gas tax revenue to new and existing transportation projects.
Accountability is also an integral part of the legislative process and voters demand it. Yet, as the plan stands, it violates voter wishes by allowing the gas tax rate to increase automatically every year. When lawmakers place tax hikes on autopilot, they strip from the budget process the responsibility and accountability that come with annual decisions about tax rates. A 2015 national public poll found that 79 percent of Americans oppose an increase in the gasoline tax to keep up with inflation and 68 percent oppose any increase in the gas tax to spend more for infrastructure.
Contrary to popular belief, the gas tax is not a user fee. Consumers must be presented with a choice of either purchasing the service from the government (by paying the fee) or purchasing the services from a private business to qualify as a true user fee. Because anyone who purchases gasoline in Indiana is forced to pay the tax, they are not considered user fees. Gas tax increases are tax increases in the same way that income and sales tax increases are. Road tolls, however, are an example of user fees. Tolls are user fees because commuters have the option of using the roads they are imposed upon or not.
An additional object of consideration is an increase in the state cigarette tax. Increasing the Hoosier State’s dependence on tobacco taxes by increasing them will not guarantee more revenue in the long run. As demonstrated by many states and cities across the nation, targeted excise taxes have proven to be unstable sources of revenue, and ultimately result in a decrease in tax receipts. For example, neighboring Illinois nearly doubled its cigarette tax in 2012 by raising the tax $1-per-pack; it generated $138 million less than projected. In fact, only three out of the 32 state tobacco tax increases, enacted between 2009 and 2013, have met or exceeded tax revenue projects.
Currently, Indiana has a regionally competitive cigarette tax rate of $.995-per pack. It is higher than Kentucky’s $.60-per pack tax but makes Indiana a net exporter of cigarettes to states like Illinois, which boasts the city with the highest state-local tax rate of $6.16-per pack in Chicago.
If enacted, this tax would likely further incentivize cigarette smuggling and cross-border sales into states like Kentucky. According to the Tax Foundation, when Illinois almost doubled the cigarette tax rate, cigarette smuggling rate dramatically increased from 1.1 percent to 20.9 percent in the first year. Consequently, small businesses in this state lost tens of thousands of dollars as patrons pursued cigarettes in less expensive markets across state lines, including in Indiana.
Targeted and regressive tax hikes on low-income consumers like smokers are unwise and will prove to be an unstable source of revenue long term.
If you need another reason to not raise taxes, which is what lawmakers do instead of reforming government, there is a good chance that federal tax reform will finally happen this year, and that it will include either a significant scaling back or outright elimination of the state & local tax deduction. The federal government has been subsidizing state tax hikes and high tax states for far too long, but the 115th Congress is looking to put an end to that.
Now that hardworking Hoosier families can finally afford to fuel their cars and heat their homes, legislators should not strip them of economic opportunity by making gas increasingly unaffordable and burdening the middle class and low-income families with more tax hikes. ATR will be educating your constituents and all Indiana taxpayers as to how lawmakers in state capitals vote on important fiscal and economic matters throughout the legislative session.
Please look to ATR to be a resource on tax, budget, and other policy matters pending before you. If you have any questions, please contact Miriam Roff, State Affairs Coordinator, at (202) 785-0266 or email@example.com.
President, Americans for Tax Reform
ATR Statement in Support of Rep. Mulvaney for OMB Director
Dear Chairman Enzi & Ranking Member Sanders,
I write in support of Congressman Mick Mulvaney for the position of Director of the Office of Management and Budget. Throughout his time in Congress, Rep. Mulvaney has displayed a commitment to addressing Washington’s rampant overspending problem and reforming the bloated federal bureaucracy. Senators should have no hesitation supporting his nomination to lead OMB and should swiftly approve him to this position.
The federal budget is on an unsustainable trajectory that must be addressed. In coming decades, spending and debt are projected to rapidly increase to historically high levels. The Director of OMB will play an integral part in reining in the out-of-control federal government and Rep. Mulvaney has proven he is willing to make the tough choices that will undoubtedly be required to reverse the looming fiscal crisis.
As an advocate of bringing the Department of Defense under full audit, Rep. Mulvaney has shown a willingness to look for waste and abuse wherever it may be.
As a signer of the Taxpayer Protection Pledge – a commitment made to his constituents to oppose any and all new tax increases – Rep. Mulvaney has shown he understands the need to reduce spending and the deficit without burdening American families and businesses with higher taxes.
Congressman Mick Mulvaney is the right choice to lead OMB at a time when the federal budget is in desperate need of restraint. I urge you and your colleagues to swiftly approve his nomination as Director of OMB.
ATR Supports Congressman Tom Price for HHS Secretary
ATR President Grover Norquist today sent a letter of support for Congressman Tom Price (R-Ga.) for the position of Secretary of the Department of Health and Human Services. Read the full letter here or below.
Dear Chairman Hatch & Ranking Member Wyden:
I write in support of Congressman Tom Price for the position of Secretary of the Department of Health and Human Services. Throughout his career in public office, Dr. Price has proven to be an advocate for pro-growth, fiscally responsible reforms, a champion of patient-centered, free market healthcare, and a supporter of ending Washington dysfunction and gridlock. All Senators should vote to confirm Rep. Price as to lead HHS.
As Chairman of the House Budget Committee, Dr. Price has released fiscally responsible proposals that address Washington’s overspending problem and reduce the deficit without burdening American families and businesses with higher taxes.
Dr. Price has also made it a priority to fix Washington’s gridlock and political dysfunction. Dr. Price last year released a detailed proposal to reform the broken federal budget process by replacing the 1974 Budget Act with reforms to reassert Congressional authority over the federal budget, establish enforceable benchmarks to rein in the deficit, and reverse the bias toward unaccountable spending.
As a member of the House Ways and Means Committee, Dr. Price has advocated for conservative, pro-growth tax reform. Dr. Price is a signer of the Taxpayer Protection Pledge, a commitment he has made to his constituents to oppose any and all new tax increases.
Over the last eight years, Dr. Price has conducted important oversight over the Obama administration. Most notably, Dr. Price last year led oversight efforts over Centers for Medicare and Medicaid Innovation (CMMI), which used its broad authority to unilaterally change to healthcare policy despite opposition from doctors, patients, and lawmakers on both sides of the aisle.
In addition to oversight over Obamacare, Dr. Price has also shown leadership in proposing free market solutions. Rep. Price is the author of the “Empowering Patients First Act,” legislation that replaces Obamacare with a series of reforms that lowers costs, increases efficiency, and empowers patients and doctors across the country.
Congressman Tom Price has a proven record fighting for lower taxes, responsible spending, free market healthcare, and an accountable federal government. Senators should have no hesitation supporting his nomination to lead HHS and should swiftly approve him to this position.
New York Governor Andrew Cuomo Proposes New Vape Tax in Budget Request
In his $152.3 billion state budget proposal, Governor Andrew Cuomo (D-N.Y.) proposed a 10-cent per mL tax on the liquid contained in electronic cigarettes and vapor products. The tax would be imposed on the wholesale level and would apply both to e-liquid that contains nicotine and e-liquid that does not. According to state revenue estimates, the tax would generate $3 million annually.
This reckless tax hike proposal flies in the face of conclusive evidence that vapor products are effective smoking cessation tools that represent no greater than 5 percent of the harms to consumers as traditional combustible tobacco cigarettes. Balancing the state budget on the backs of smokers looking to quit flies in the face of decades of efforts aimed at curbing cigarette use to drive down public health costs.
Currently, six states impose an excise tax on vapor products including North Carolina (5 cents per mL), Louisiana (5 cents per mL), Kansas (20 cents per mL), West Virginia (7.5 cents per mL), Pennsylvania (40% wholesale), and Minnesota (95% wholesale). Beginning April 1, California will also impose a 27.3% wholesale tax on vapor products.
Earlier this month I outlined the possible relationship between state overspending problems like New York's and possible tax threats to vapor products in the states. That map can be found below and the original piece can be read here. Click the map to enlarge.
Though only a small portion of Cuomo’s large tax hike plans (including an extension of the nearly 9% “temporary” tax surcharge on income over $1 million), the tax on vapor products is among the most punitive. It not only targets smokers, who are some of the most heavily taxed consumers in the United States, but it targets former smokers who have found vapor products as a successful means of quitting smoking. Similar to other nicotine replacement therapies (NRTs), vapor products should remain taxed at the sales tax rate exclusively.
The state’s declining revenue collections from cigarettes may play a role in the increased interest from the governor in taxing vapers. During the current fiscal year, tobacco products generated about $1.3 billion for the state, a figure projected to decrease to roughly $1.2 billion this year and even further in future years. At $4.35 per pack, New York’s state cigarette tax is the highest in that nation. Residents of the Big Apple are hit with another local tax that brings smokes bought there to a per pack tax rate of $5.85.
This high cigarette tax rate has led to the highest rate of cigarette smuggling in the nation. According to an analysis conducted by the nonpartisan Tax Foundation and Mackinac Center for Public Policy, 55.4 percent of cigarettes consumed in the state are smuggled in, which helps consumers avoid paying taxes on the products.
Unlike cigarettes, consumers can purchase vapor products online where taxes are not collected or imposed by the government. This will result in the closing of vape shops across the Empire State, a loss in sales, income, and excise tax revenue, and will harm those seeking a brick and mortar experience in their quit journey.
The legislature should reject this senseless cash grab and focus on spending restraint instead.
Want to keep up to date with news like this? Subscribe to my newsletter, "Vapor News and Views," by clicking here.
Isn't it wonderful to give away other people's money? First you come up with all kinds of freebies. Then you decide who should foot the cost! You won't pay for the freebies from savings or sacrificing other services which may not be as needed. Nope, you find some suckers to pay for it by taxing them more! Wow, that's really clever. And the population of Florida just keeps on growing, and New York's shrinking. I guess people aren't as dumb as we think they are.
New York State collects over one billion dollars a year in cigarette taxes. He's now proposing a tax that will collect '3 million dollars' per year. Do you really think he'll leave it at that? Hah!
Thank God I moved out of New York years ago.
New York (like California and other states) are hurting for revenue now more than ever, partly due to the tobacco bonds they've issued in recent years. These tobacco bonds leverage future tobacco tax and MSA payments, which are proportional to the sales of actual tobacco cigarettes in the state. Now that smokers are switching from smoking to vaping, these states are having to pull funds from other revenue pools to pay the dividends on the bond issues, and they're scrambling to find another revenue source (vaping).
These states gambled that smokers would continue to smoke at current or higher rates, and the tobacco economy would continue on the projected course. They were wrong.
ATR Statement in Support of Steven Mnuchin for Treasury Secretary
ATR President Grover Norquist issued the following statement today in support of President-elect Donald Trump’s nomination of Steven Mnuchin for Secretary of the Treasury:
“Americans for Tax Reform supports Donald Trump’s nomination of Steven Mnuchin to be the next Secretary of the Treasury. Mr. Mnuchin truly understands the importance of tax reform and its positive impact on economic growth and job creation. He has extensive experience in housing, finance, banking, and trade, as well as a far-reaching comprehension of financial markets.
“Mr. Mnuchin has committed to passing pro-growth tax reform in 2017. It has been more than thirty years since tax reform was last signed into law and our tax code is woefully outdated and uncompetitive. Pro-growth reform will ensure higher wages, more jobs, and a stronger economy while also helping our businesses compete with the rest of the world.
“Under President Obama Americans have seen the role of government in the market increase exponentially with regulatory regimes such as the Dodd-Frank Act. While Dodd-Frank was supposed to target Wall Street, impacts of the law have instead fallen heaviest on Main Street, reducing small business lending, shuttering credit unions and community banks, and growing the number of unbanked Americans.
“Mr. Mnuchin has made it clear that reforming the Dodd-Frank Act will be his ‘number one priority on the regulatory side’ once he becomes Secretary of the Treasury.
“I know that Mr. Mnuchin will be a leader in his role as Treasury head, and will work to ensure American consumers and taxpayers are protected, while also working to foster a regulatory climate that allows business to grow and prosper.”
Photo credit: greatagain.gov
A stimulus during a boom, even a small boom, is unwise
Norquist: Trump and House GOP Tax Reform Plan Coming Together
ATR president Grover Norquist was a guest today on Mornings with Maria on the Fox Business Network to discuss tax reform. He said:
The big story over time is how Trump’s plan and the House Republican plan – Chairman Brady and Paul Ryan – have come together. Remember, Trump started at 15% -- the corporate rate – and the Republican plan started at 25%. When they updated it they moved it to 20% towards where Trump was. Trump’s was the only Republican plan, of all the 1500 Republican candidates for president, he was the only one who didn’t include full expensing for business investment in his first plan. Second plan, he joined with the House in going to full expensing for business. So rather than long depreciation schedules, you expense it the first year. Very powerful pro-growth tool. So on both of the drivers of growth, full expensing and a lower corporate rate, the Trump plan and the House Republican plan have moved towards each other in the right direction.
The full video can be found here
Norquist Statement Urging Support of Betsy DeVos Nomination
ATR President Grover Norquist sent the following letter urging senators to approve the nomination of Betsy DeVos as Secretary of Education:
On behalf of Americans for Tax Reform, I write you to urge your committee and the full United States Senate to approve the nomination of Betsy DeVos to become the Secretary of Education.
Betsy DeVos has been a leader in providing innovative solutions to bring higher quality education to children throughout the United States who are most lacking in educational options and opportunity.
As chairperson of the American Federation for Children, Mrs. DeVos assisted organizations and lawmakers in dozens of states to promote and adopt policies to enable students, particularly from high-need communities, to have equal access to schools that best meet their educational needs.
Thanks in part to Mrs. DeVos, more than half the states have tax policies that encourage charitable donations to scholarship funds to help students from low-income families, or encourage support for students with disabilities, or enable parents to choose schools that best meet the needs of their children. More than 40 states now have charter school laws.
The specific approach of education tax credits to encourage increased charitable support for scholarship funds has been especially effective in providing children from low-income families a financial pathway to attend a quality school – something that upper income parents already can provide for their children. At present, 17 states have a donation tax credit law for scholarships, which serve as models for Congress to consider adopting nationally so that many more children can be empowered to attend schools that will provide the education they need and deserve.
Thanks to the leadership and encouragement of Betsy DeVos, there are millions of students who have an education that puts them on a quality-of-life trajectory to become productive citizens.
It is this kind of national leadership that has made a positive difference in the lives of so many students that warrants your approval for Betsy DeVos to become the next Secretary of Education.
President, Americans for Tax Reform
Rep. Emmer's "CREATE Jobs Act" Will Fix America's Competitiveness Problem
Congressman Tom Emmer (R-MN) recently introduced H.R. 533, the Corporate Rate Equality and Trade Empowerment (CREATE) Jobs Act. This innovative legislation lowers the corporate tax rate to a globally competitive level so American businesses are able to compete in the global economy. ATR urges all members of Congress to support and co-sponsor Rep. Emmer’s bill.
America’s corporate income tax rate is close to 15 percent higher than the average in the developed world. The tax rate has barely changed since tax reform was passed 30 years ago in 1986. At the time, we lowered our rate to 39 percent – below the developed average of 44 percent. Since then, other countries have cut their rates aggressively.
32 of the 35 developed countries have reduced their corporate rates since 2000. Only the U.S. and Chile have higher corporate tax rates than they did in 2000. Our high rate makes it difficult, if not impossible for our businesses to compete with competitors that have much lower rates Canada (26.3 percent), the United Kingdom (20 percent), and Ireland (12.5 percent).
The CREATE Jobs act would address this inequity by reducing the U.S. corporate rate to five points below the OECD average and creating a process by which the U.S. rate is regularly reviewed to ensure economic competitiveness.
The current high U.S. rate not only hurts American competitiveness, it has real world implications for the economy. The high rate has resulted in close to 50 American businesses leaving the country through an inversion in the past decade, according to data compiled by Democrats on the Ways and Means Committee. The uncompetitive code has also resulted in a net loss of more than $700 billion in assets that have been acquired by foreign competitors according to a report by Ernst and Young.
By creating a system that creates a competitive corporate tax rate, Rep. Emmer’s CREATE Jobs Act ensures that the U.S. again becomes a leader in the global economy and it stays there. Members of Congress should support and pass H.R. 533 to help provide a much needed booster shot to the economy.
The letter can be read here.