A Johnson “YES” Vote for Tax Reform Bill Will Help Middle Class Wisconsin Households

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Posted by John Kartch on Thursday, November 16th, 2017, 1:26 PM PERMALINK


The Senate’s Tax Cuts and Jobs Act will finally repeal the Obamacare individual mandate tax. Repeal of this Obamacare tax will be of great help to middle class Wisconsin households. Americans for Tax Reform urges Sen. Ron Johnson to vote YES.

According to official IRS data Middle class Wisconsin households will benefit greatly from a Johnson YES vote:

  • If Sen. Ron Johnson votes YES on the Tax Cuts and Jobs Act 105,040 Wisconsin households will no longer be stuck paying Obamacare’s individual mandate tax
  • In 2015, these Wisconsin households had to pay the IRS $42,073,000 for choosing not to purchase Obamacare, an average tax penalty of $401 per household
  • 82% of Wisconsin households paying this tax make less than $50,000 per year
  • If Sen. Johnson votes NO, Wisconsinites will be forced to pay Obamacare’s individual mandate tax simply for choosing not to purchase Obamacare.
     

Contact Senator Johnson’s office and urge him to vote YES on the Tax Cuts and Jobs Act. 

328 Hart Senate Office Building
Washington, DC 20510
Phone: (202) 224-5323

Photo Credit: Gage Skidmore


Senators Should Support the Tax Cuts and Jobs Act

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Posted by Alexander Hendrie on Wednesday, November 15th, 2017, 5:37 PM PERMALINK

The Senate’s Tax Cuts and Jobs Act is a pro-growth, pro-family proposal that will reduce taxes on Americans at every income level and dramatically simplify the 70,000+ page tax code. It will also provide a much-needed overhaul to the outdated tax code so that businesses large and small will again be able to compete against foreign competitors and create jobs across the country.

The Senate Finance Committee this week is moving through a comprehensive regular order process that has included years of Committee hearings and Member input. Following the completion of this process later this week, the Senate should swiftly take up and pass the Tax Cuts and Jobs Act.

The Tax Cuts and Jobs Act will Reduce Taxes for Americans of Every Income Level

The Tax Cuts and Jobs Act provides tax reduction for Americans of every income level. The Senate bill doubles the standard deduction to $12,000, or $24,000 for a family. About 70% of filers – or 105 million individuals and families currently take the standard deduction, and these families would see strong tax reduction.

The plan also reduces almost every tax bracket, resulting in tax cuts across the board. Under this plan, a family of four earning $73,000 would see a tax reduction of 40% or $1,500 per year.

 The Middle Class would be the biggest winners under the Senate tax bill. Under this plan, those earning between $50,000 and $70,000 would receive a tax deduction of 7.1% in 2019, and earners making between $20,000 and $30,000 would see their taxes fall by 10.4%.

The Tax Cuts and Jobs Act is Pro-Family

The Senate tax bill doubles the child tax credit to $2,000 per child. Expanding the child tax credit will help millions of Americans across every state. According to the most recent IRS data, more than 22 million Americans used the child tax credit in 2015. These families will see strong tax reduction, and will also see simplification from the consolidation of other pro-family tax preferences into the expanded child tax credit.

The Tax Cuts and Jobs Act Dramatically Simplifies the Tax Code

Today, the tax code is absurdly complex. Since 1985 the tax code has doubled, and it has increased six fold since 1955. Today, the code totals 2.4 million words. This complexity costs Americans millions of hours and billions of dollars in lost productivity.

According to the Tax Foundation, Americans will spend more than 8.9 million hours complying with the tax code, costing $409 billion. 2.6 billion hours will be spent complying with individual income taxes, costing $98 billion each year. Similarly, the National Taxpayers Union Foundation estimates that taxpayers spend 1.8 billion hours on 1040 forms a year, costing $262 billion every year.

The many reforms in the Senate tax bill, including the doubling of the standard deduction and the repeal of many deductions and credits will drastically simplify the code and reduce the compliance burden on American families.

The Tax Cuts and Jobs Act Reduces Taxes on Businesses Large and Small

The Senate tax bill proposes a globally competitive 20 percent corporate rate that will allow American businesses to compete against foreign competitors. The U.S. currently has the highest marginal corporate income tax rate in the developed. At 35 percent (plus an average state rate of 4 percent), the U.S. corporate rate is nearly 15 points higher than the typical developed country which has a rate around 25 percent. Since 2000, 32 of the 35 developed countries have reduced their corporate rates. Only the U.S. and Chile have higher corporate tax rates.

The Tax Cuts and Jobs Act also proposes drastic tax reduction for businesses organized as pass-through entities (LLCs, sole-properties, partnerships etc.) The bill creates a 17.4 percent deduction on pass-through income resulting in tax relief for millions of small businesses across the country.

The Tax Cuts and Jobs Act Repeals the Individual Mandate

The Senate’s Tax Cuts and Jobs Act repeals Obamacare’s individual mandate, resulting in strong tax relief for millions of middle class families. The annual tax is currently $695 for an individual, and $2,085 for a family of four, or 2.5% of your household income, whichever is higher.

According to IRS data compiled by the office of Senator Steve Daines, 6.6 million households paid the individual mandate in 2015. 79 percent of those households have a yearly income of less than $50,000, while 37 percent of those households have a yearly income of less than $25,000.

The Tax Cuts and Jobs Act Will Create Higher Wages and More Jobs

Over the past decade, the economy has struggled at just two percent GDP growth as the country has experienced the worst recovery in the modern era. The Congressional Budget Office projects that under current policies, two percent growth will continue into the next decade. Because of this lackluster recovery, families have lost an average of $8,600 in annual income, according to Joint Economic Committee.

The Tax Cuts and Jobs Act will reverse this alarming trend, result in higher wages and new or better jobs for Americans across the country. According to a recent White House study, a 20 percent corporate tax rate would increase average household income by at least $4,000 a year.

The Tax Foundation estimates that the bill will grow the overall economy by 3.7% in the long term. The tax reductions will grow wages by 2.9% over the long term, delivering much needed relief to Americans blighted by wage stagnation over the past eight years. In the long run, the plan increases after-tax income of all taxpayers by 4.4% and will create approximately 1 million jobs.

The Tax Cuts and Jobs Act Moves toward a Globally Competitive Territorial System of Taxation

The tax reform plan replaces the outdated worldwide system of taxation with a territorial system of taxation. Currently, the U.S. tax code subjects American businesses to two layers of taxation – once when the income is earned overseas, and again when it is brought back to the U.S. to be reinvested in jobs and wages.

This creates a disadvantage for American companies, especially as the U.S. is one of six countries in the developed world that still uses a worldwide system of taxation. Today, 95 percent of consumers live outside the U.S. and a total of 41 million jobs are tied to business operations overseas, so this outdated system results in lost jobs and lower wages.

The Tax Cuts and Jobs Act Will Encourage More Investment in the U.S.

The Senate tax bill implements immediate, 100 percent full business expensing for the next five years, and expands Section 179 small business expensing. This will encourage businesses to make more investment in the U.S. economy and will dramatically simplify the tax code.

Under current law, businesses must deduct, or “depreciate” the cost of new investments over multiple years depending on the asset they purchase, as dictated by arbitrary IRS rules. Moving to full expensing ends this distortion and treats all investment equally.

According to research by the Tax Foundation, implementing full business expensing increases GDP by five percent after a decade and increases wages by 4 percent, creating more than one million jobs.

Photo Credit: Jim Grey


Senate Tax Reform Bill Provides Massive Middle Class Tax Relief


Posted by John Kartch on Wednesday, November 15th, 2017, 2:24 PM PERMALINK

Take Action: Stop Obamacare Taxes Now

79% of Households Hit With Obamacare Mandate Tax Make Less Than $50,000

The Senate’s Tax Cuts and Jobs Act repeals Obamacare’s individual mandate tax penalty. Repeal of the Obamacare individual mandate tax penalty gives further tax relief to middle class families. Repeal also ensures that the Senate’s Tax Cuts And Jobs Act allows permanent tax reduction for families and businesses in the form of a permanent, 20 percent corporate rate and a $2,000 child tax credit.

Official IRS data for tax year 2015 compiled by the office of Sen. Steve Daines (R-Mont.) indicates that low income Americans shoulder the burden of this tax:

  • In tax year 2015 -- 6,665,480 households paid a total of $3,079,255,000 in individual mandate tax penalties
     
  • 79% have a yearly income of less than $50,000
     
  • 37% have a yearly income of less than $25,000 


Please visit the website of Sen. Daines to get a handy PDF of the state-by-state Obamacare IRS tax data.

See state examples below:

ALASKA

  • If Sen. Lisa Murkowski votes YES on the Tax Cuts and Jobs Act 19,970 Alaska households will no longer be stuck paying Obamacare’s individual mandate tax.
  • In 2015, these households had to pay the IRS $12,836,000 for choosing not to purchase Obamacare, an average tax of $644 per household
  • 64% of Alaska households paying this tax make less than $50,000 per year.
  • If Sen. Murkowski votes NO, Alaskans will be forced to pay Obamacare’s individual mandate tax simply for choosing not to purchase Obamacare.

 

MAINE

  • If Sen. Susan Collins votes YES on the Tax Cuts and Jobs Act 34,030 Maine households will no longer be stuck paying Obamacare’s individual mandate tax.
  • In 2015, these households had to pay the IRS $15,490,000 for choosing not to purchase Obamacare, an average tax of $455 per household.
  • 79% of Maine households paying this tax make less than $50,000 per year.
  • If Sen. Collins votes NO, Mainers will be forced to pay Obamacare’s individual mandate tax simply for choosing not to purchase Obamacare.

 

ARIZONA

  • If Sen. John McCain votes YES on the Tax Cuts and Jobs Act 153,700 Arizona households will no longer be stuck paying Obamacare’s individual mandate tax.
  • In 2015, these households had to pay the IRS $69,770,000 for choosing not to purchase Obamacare, an average tax of $454 per household.
  • 82% of Arizona households paying this tax make less than $50,000 per year.
  • If Sen. McCain votes NO, Arizonans will be forced to pay Obamacare’s individual mandate tax simply for choosing not to purchase Obamacare.

 

INDIANA

  • If Sen. Joe Donnelly votes YES on the Tax Cuts and Jobs Act 138,170 Indiana households will no longer be stuck paying Obamacare’s individual mandate tax.
  • In 2015, these households had to pay the IRS $59,463,000 for choosing not to purchase Obamacare, an average tax of $430 per household.
  • 81% of Indiana households paying this tax make less than $50,000 per year.
  • If Sen. Donnelly votes NO, Indianans will be forced to pay Obamacare’s individual mandate tax simply for choosing not to purchase Obamacare.

 

MISSOURI

  • If Sen. Claire McCaskill votes YES on the Tax Cuts and Jobs Act 116,580 Missouri households will no longer be stuck paying Obamacare’s individual mandate tax.
  • In 2015, these households had to pay the IRS $50,016,000 for choosing not to purchase Obamacare, an average tax of $429 per household.
  • 81% of Missouri households paying this tax make less than $50,000 per year.
  • If Sen. McCaskill votes NO, Missourians will be forced to pay Obamacare’s individual mandate tax simply for choosing not to purchase Obamacare.

 

MONTANA        

  • If Sen. Jon Tester votes YES on the Tax Cuts and Jobs Act 29,450 Montana households will no longer be stuck paying Obamacare’s individual mandate tax.
  • In 2015, these households had to pay the IRS $14,341,000 for choosing not to purchase Obamacare, an average tax of $487 per household.
  • 75% of Montana households paying this tax make less than $50,000 per year.
  • If Sen. Tester votes NO, Montanans will be forced to pay Obamacare’s individual mandate tax simply for choosing not to purchase Obamacare.

 

NORTH DAKOTA

  • If Sen. Heidi Heitkamp votes YES on the Tax Cuts and Jobs Act 17,170 North Dakota households will no longer be stuck paying Obamacare’s individual mandate tax.
  • In 2015, these households had to pay the IRS $7,826,000 for choosing not to purchase Obamacare, an average tax of $456 per household.
  • 77% of North Dakota households paying this tax make less than $50,000 per year.
  • If Sen. Heitkamp votes NO, North Dakotans will be forced to pay Obamacare’s individual mandate tax simply for choosing not to purchase Obamacare.

 

WEST VIRGINIA

  • If Sen. Joe Manchin votes YES on the Tax Cuts and Jobs Act 34,360 households will no longer be stuck paying Obamacare’s individual mandate tax.
  • In 2015, these households had to pay the IRS $14,680,000 for choosing not to purchase Obamacare, an average tax of $427 per household.
  • 81% of West Virginia households paying this tax make less than $50,000 per year.
  • If Sen. Manchin votes NO, West Virginians will be forced to pay Obamacare’s individual mandate tax simply for choosing not to purchase Obamacare.

 

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20 Conservative Groups Support the Senate’s Tax Cuts and Jobs Act

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Posted by Alex Hendrie on Monday, November 13th, 2017, 7:00 PM PERMALINK

A coalition of 20 conservative groups led by Americans for Tax Reform today wrote to Chairman Orrin Hatch and the members of the Senate Finance Committee supporting the Chairman’s mark of the Tax Cuts and Jobs Act.

[The letter can be found here]

As the letter says, the Tax Cuts and Jobs Act simplifies the code, reduces taxes for families and businesses, and grows the economy. While there is still more work to be done, the Act is an excellent start, and the signers are ready to work with the Committee to pass comprehensive tax reform before the end of the year.

The full letter can be found here and is below:

Dear Chairman Hatch and Members of the Senate Finance Committee:

We write in support of the Chairman’s mark of the Tax Cuts and Jobs Act. The release of this legislation marks an important step in passing comprehensive tax reform before the end of the year. We urge your committee to swiftly approve this bill and send it to the full Senate for consideration.

Just like the House bill, your proposal is pro-growth and pro-family. This legislation simplifies the code, reduces taxes for families and businesses, and grows the economy, leading to higher wages and new or better jobs.

Importantly, more work needs to be done, such as ensuring full repeal of the death tax. As you move through the committee process this week, it is imperative that this unfair tax is repealed.

Congress has a rare opportunity this year to reform the broken federal tax code. We stand ready to work with you as the Senate Finance Committee continues moving through regular order starting with mark-up of the legislation this week.

Sincerely,

Grover Norquist
President, Americans for Tax Reform

Pete Sepp
President, National Taxpayers Union

Christine Harbin
Vice President of External Affairs, Americans for Prosperity

James L. Martin
Founder & Chairman, 60 Plus Association

Lisa B. Nelson
Chief Executive Office, ALEC Action

Phil Kerpen
President, American Commitment

Andrew Quinlan
President, Center for Freedom and Prosperity

Olivia Grady
Senior Fellow, Center for Worker Freedom

Dan Caldwell
Executive Director, Concerned Veterans for America

Matthew Kandrach
President, Consumer Action for A Strong Economy (CASE)

Thomas Schatz
President, Council for Citizens Against Government Waste

Katie McAuliffe
Executive Director, Digital Liberty

Nathan Nascimento
Vice President of Policy, Freedom Partners Chamber of Commerce

Jason Pye
Vice President of Legislative Affairs, FreedomWorks

Carrie Sheffield

Executive Director, Generation Opportunity

Mario H. Lopez
President, Hispanic Leadership Fund

Heather R. Higgins
President & CEO, Independent Women’s Voice

Daniel Garza
President, The LIBRE Initiative

Lorenzo Montanari
Executive Director, Property Rights Alliance

David Williams
President, Taxpayers Protection Alliance

Photo Credit: Pixabay


ATR Feedback on the Chairman’s Mark of the Tax Cuts and Jobs Act


Posted by Alex Hendrie on Monday, November 13th, 2017, 7:00 PM PERMALINK

[Full PDF Document Can be Found Here]

Americans for Tax Reform today provided feedback applauding Senate Finance Committee Chairman Orrin Hatch’s mark of the Tax Cuts and Jobs Act.

The Tax Cuts and Jobs Act is pro-family and pro-growth.

The legislation gives tax cuts for Americans of all income levels and simplifies the code. The largest benefit goes to the middle class, according to the Joint Committee on Taxation.

The Act helps Americans by doubling the standard deduction, expanding the Child Tax Credit, and fully repealing the Alternative Minimum Tax. The Act also simplifies the code by repealing distortionary deductions and credits, like the State and Local tax deduction.

On the business side, the Act makes America more competitive in the world, resulting in more jobs and stronger economic growth: another win for Americans of all income levels, most particularly those currently without a job.

The Act reduces the current 35% marginal corporate tax rate, the highest in the developed world, to 20% and replaces the worldwide taxation system with a territorial system. It further implements 100 percent expensing of new investments for five years, and it maintains the existing deductions for advertising. In addition, section 1031 for like-kind exchanges is also maintained, and there is a reasonable deduction for interest expenses.

Americans for Tax Reform, however, does urge the Committee to fully repeal the Death Tax, grandfather in the elimination of the deduction of deferred employee compensation, and extend the minimum hold period for access to long-term capital gains to three years. These changes would create even more jobs and economic growth.

While more work needs to be done, Americans for Tax Reform applauds the Senate Finance Committee on its work and supports the Tax Cuts and Jobs Act.

[Full PDF Document Can be Found Here]

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KEY VOTE: ATR Urges Passage of H.R. 1, the Tax Cuts and Jobs Act


Posted by Alexander Hendrie on Monday, November 13th, 2017, 8:00 AM PERMALINK

The Tax Cuts and Jobs Act lives up to its name. The legislation cuts taxes on Americans of all income levels and will grow the economy, leading to new and better jobs and more take-home pay.

ATR urges a YES vote on H.R. 1

Later this week, the House of Representatives will vote on H.R. 1, the Tax Cuts and Jobs Act. All members of Congress should vote YES on this important legislation.

“House passage of the Tax Cuts and Jobs Act is an important step toward enacting a pro-growth tax reform package that reduces taxes for Americans at all income levels and fulfills the promises of the tax reform framework put forward by the GOP leadership this summer,” Said Grover Norquist, President of Americans for Tax Reform. “The tax reform bill’s biggest winner will be the person who couldn’t find a job during eight years of stagnation under Obama.”

By voting YES on the Tax Cuts and Jobs Act members of Congress have a rare opportunity to reform the broken tax code and offer relief to taxpayers across the country.

This legislation contains numerous provisions that simplify the tax code, give tax cuts to families and businesses, and grow the economy leading to higher wages and new or better jobs.

Individual Provisions:

Consolidates the seven tax brackets into four (12%, 25%, 35%, and 39.6%) - Under this reform, the existing 10 percent bracket goes to zero. The 15 percent bracket goes to 12 percent.

-The 12 percent bracket applies to income up to $45,000 ($90,000 for married couples). This does not include the standard deduction of $12,000 or $24,000.

-The 25 percent bracket applies to income between $45,001 and $200,000 ($90,001 and $260,000 for married couples).

-The 35 percent bracket applies to income between $200,001 and 500,000 ($260,001 and $1 million for married couples).

-The 39.6 percent bracket applies to income above $500,000 ($1 million for married couples).

-Doubles the standard deduction (The first $12,000 for individuals and $24,000 for families will not be taxed). 

-Increases the child tax credit from $1,000 to $1,600 per dependent under 17 with an additional $300 credit per parent. The child tax credit is currently used by 22 million Americans.

-Simplifies the tax code – The bill repeals personal exemptions, repeals the state and local tax deduction for income and sales taxes and caps the SALT deduction for property taxes at $10,000. The home mortgage interest is grandfathered in and preserved for new homes up to $500,000. All other itemized deductions with the exception of charitable giving are repealed.

-Repeals the alternative minimum tax – This tax is currently paid by 4.5 million individuals and families.

-Repeals the death tax effective 2025 - In years 2018 to 2024, the exemption is doubled to $10 million ($20 million for a couple) and indexed to inflation. The generation skipping transfer tax is also repealed while the gift tax is lowered from 40 percent to 35 percent. Step-up in basis is preserved.

-Preserves retirement tax savings accounts such as 401(k)s and Individual Retirement Accounts.  

Business Provisions:

-Permanently reduces the corporate income tax rate to 20 percent effective immediately - The current 35 percent federal rate is the highest in the developed world. Reducing this rate to 20 percent will allow American businesses to compete against foreign competitors and will allow the U.S. economy to grow. According to an analysis by the Council of Economic Advisers, a 20 percent corporate rate would increase average household income by between $4,000 and $9,000.

-Enacts 100 percent, full business expensing for five years - Section 179 small business expensing is increased from $500,000 to $5 million, and the phaseout is increased from $2 million to $10 million.

-Reduces the business tax rate on pass-through entities from 44.6 percent to 25 percent - This new rate would be applied based on one of two formulas designed to prevent wage income from being mischaracterized as business income.

 -Implements a partial cap on deductibility of net interest expense for corporations - The cap will be applied when a corporation’s net interest exceeds 30 percent of earnings before interest, tax, depreciation and amortization (EBITDA).

-Implements a modern, territorial system of taxation so that American businesses operating overseas can compete.

-Introduces a one-time repatriation rate of 14 percent for cash and 7 percent for non-cash, payable over eight years. This allows $2.6 trillion in after-tax income to come back to the U.S. to be reinvested in the economy. Ideally, the repatriation rate should be single digit rates. However, this reform will still allow trillions to come back into the U.S. economy. 

 

 

 

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ATR Analysis of the Senate’s Tax Cuts and Jobs Act

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Posted by Alexander Hendrie on Friday, November 10th, 2017, 10:43 AM PERMALINK

The U.S. Senate last night released their tax reform plan, the “Tax Cuts and Jobs Act.” Senate Finance Committee Chairman Orrin Hatch (R-Utah) and members of the Committee should be commended for releasing a tax plan that cuts taxes for individuals, simplifies the code, and allows American businesses to compete and thrive abroad and at home.

ATR President Grover Norquist released the following statement praising the plan:

“The release of the Senate outline for tax reform following the House Ways and Means legislation makes it clear that existing differences can be negotiated within a matter of weeks to enact a pro-growth tax reform package that reduces taxes for Americans at all income levels and fulfills the promises of the tax reform framework put forward by the GOP leadership this summer.”

Both the House and Senate bills reduce taxes for Americans of all income levels, reduce taxes on businesses, and implement reforms to the code that will grow the economy, leading to higher wages and new or better jobs.

In following a lengthy regular order process that has included dozens of hearings, the Senate Finance Committee will begin marking up this legislation next week. The Finance Committee should quickly approve this bill and send it to the full Senate for approval.

Individual provisions

-While the house bill contains four brackets, the Senate bill maintains the existing seven brackets. However, the Senate bill lowers (almost) every bracket and is a significant net tax cut.

                -Current law: 10, 15, 25, 28, 33, 35, 39.6

                -Senate bill: 10, 12.5, 22.5, 25, 32.5, 35, 38.5

                -House bill: 12, 25, 35, 39.6

The Senate bill would see strong tax reduction for American families across the country. A family of four earning $73,000 would see a tax cut of nearly $1,500 – a tax reduction of 40 percent.

-Both bills double the standard deduction ($6,000 to $12,000 for an individual. $12,000 for a family and $24,000 for a family).

-The Senate bill fully repeals the State and Local Tax deduction. The House bill leaves intact a $10,000 limit on deductibility of property taxes but otherwise repeals SALT.

-Both bills increase the child tax credit. The Senate bill increases the CTC to $1,650 per child, while the House bill increases the CTC to $1,600 per child with a $300 credit for parents and adult dependents.

- The House bill doubles the exemption for the Death Tax (to roughly $10M per individual) and repeals it fully after six years. The Senate bill also doubles the exemption but fails to repeal the Death Tax.

-Both bills repeal the Alternative Minimum Tax.

-The House bill creates a $500,000 cap on the home mortgage deduction. The Senate preserves the existing $1 million cap.

-Both bills preserve existing 401(k) and retirement tax preferences.

Business

-Both proposals propose a 20 percent rate, which would take the U.S. rate from the highest in the developed world to a rate that is competitive with the rest of the world. The Senate bill implements this rate in 2019, while the House bill implements a 20 percent rate effective 2018.

-According to an analysis by the Council of Economic Advisers, a 20 percent corporate rate would increase average household income by between $4,000 and $9,000.

-Both proposals implement 100 percent expensing for five years.

-Both proposals also expand Sec. 179 small business expensing. The House bill increases Sec. 179 from $500,000 to $5 million, with the phaseout increasing from $2 million to $10 million for five years. The Senate bill permanently increases Sec. 179 to $1 million with a phaseout of $2.5 million.

-Both proposals preserve Sec. 1031 like-kind exchanges for real property.

-Both proposals limit the deductibility of net interest. The House bill utilizes a 30 percent cap when net interest exceeds earnings before interest, tax, depreciation and amortization (EBITDA). The Senate bill also limits deductibility of interest to 30 percent of modified taxable income.     

-Both proposals reduce the tax rate on pass-through entities (sole-properties, partnerships, LLCs, S-corps)

-The Senate bill provides a 17.4% deduction for domestic non-service pass-through income.

-The House bill applies a 25% rate to 30 percent of non-service pass-through income, while 70 percent is taxed as individual income.

-Both bills repeal or limit multiple credits and deductions:

-Sec. 199 domestic manufacturing deduction is repealed.

-The net operating loss deduction is limited.

-Deductions for entertainment and transportation expenses are limited.

-The tax credit for the production of drugs for rare diseases is repealed in the House bill but not the Senate bill

International

-Implements a modern, territorial system of taxation through the creation of a 100 percent dividend exemption system.

-Both proposals implement base erosion rules designed to ensure that income is not improperly assigned to low tax jurisdictions.

-Both the House and Senate plans implement a repatriation rate. The House has a 14 percent for cash, and 7 percent for non-cash, while the Senate has a 10 percent rate for cash and a 5 percent rate for non-cash. This allows an estimated $2.6 trillion in after-tax income to come back to the U.S. to be reinvested in the economy. Ideally, the repatriation rate should be single digit rates. However, this reform will still allow trillions to come back into the U.S. economy. 

Photo Credit: Gage Skidmore

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Justice System Improvements Take Effect in Louisiana

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Posted by Jorge Marin on Thursday, November 9th, 2017, 3:52 PM PERMALINK

 

Louisiana is moving ahead with its rollout of this year’s prison modernization initiatives.

After a landmark bipartisan vote, Pelican State lawmakers passed a package of criminal justice reforms that were based on the recommendations of the Louisiana Justice Reinvestment Taskforce.

The task force –a non-partisan group of 14 members with diverse professional experience, including prosecutors, defense attorneys, representatives of the courts and executive branch, lawmakers and other seasoned criminal justice experts – was called together to solve a major criminal justice problem in Louisiana.

For years, Louisiana tried to simply warehouse offenders. But this dated approach resulted in runaway spending and lackluster safety gains. Indeed, Louisiana has been the prison capitol of the world yet still had some of the nation’s worst public safety statistics.

The task force did not take its job lightly. To develop its recommendations, the Task Force underwent a top to bottom analysis of Louisiana’s criminal justice system, a close examination of policies that have proven successful in other southern states, and even reviewed scientific research about changing criminal behavior and keeping the public safe.

The task force’s suggestions to this problem were well thought out and logical: penalties in Louisiana should be both tailored to fit the crime committed and designed to permanently fix criminal behavior. It is no secret that just locking someone up for years only creates a better criminal. Studies have shown that certain inmates experience a higher likelihood of reoffending after a certain sentence length. This is due to increased exposure of less dangerous individuals to hardened criminals over time.

After last year’s prison bills, low level offenders will receive sentences that more closely reflect their crime and the harm they pose to society. Certain offenders will also qualify for earlier parole, allowing them to avoid the criminogenic effects of prison while being monitored by law enforcement. Time off will depend in many cases on the inmate’s participation in means-tested recidivism reduction programs. If they want time off, they will have to earn it.

What’s more, almost all people currently incarcerated in the state will be released at some point. These reforms improve the system by ensuring that it is focused on reducing their likelihood of reoffending.

As part of the changes, 1,900 nonviolent offenders were released earlier this month after their sentences were adjusted to reflect this year’s reforms, but this should not cause any alarm. Absent any reform, these offenders would have been released in the coming months as a matter of course. Louisiana already releases roughly 1,500 inmates a month anyway, so the upcoming release accounts for a one month doubling of the average.  They’ll be home for Thanksgiving now, instead of having to wait until after the New Year.

According to Executive Director of the Louisiana District Attorneys Association Pete Adams, DAs want to handle reform “in a manner that was responsible and that protected public safety,” and lauded the reform package. They echoed hopes that “with these changes, we can generate some savings, build up these services, and lower our incarceration rate safely.”

Without reform, Louisiana would have missed out on the public safety gains seen in states like Georgia, Texas, and South Carolina—states that have been using the same data-driven process to craft evidence-based improvements to great effect.

In a recent poll, 68% of Louisianans agreed that whether the system reduces crime is more important than the sentence length. These reforms are proven, smart, and popular. It would be a major error to roll back Louisiana’s commitment to public safety.

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The “Bubble Rate” Is Not A 46 Percent Rate and Is Consistent with the Taxpayer Protection Pledge

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Posted by Alexander Hendrie on Sunday, November 5th, 2017, 1:07 PM PERMALINK

An article released earlier this week in Politico claimed that the House Republican tax reform legislation contains a 46 percent tax bracket. However, H.R. 1 does not create a new, higher tax bracket. It is simply a phaseout of the 12 percent bracket for those within the top bracket. Bubble rates were a feature of President Reagan’s landmark 1986 tax reform legislation.

H.R. 1 is also consistent with the Taxpayer Protection Pledge, a written commitment to constituents made by 209 members of the House of Representatives including House Speaker Paul Ryan and Ways and Means Chairman Kevin Brady.

Under the legislation, families earning above $1.2 million see the benefits of the 12 percent bracket (applying to income below $90,000) phased out up to $1.614 million worth of earnings. This claw back shouldn’t be considered a higher tax bracket, but rather a way of phasing out the 12 percent bracket.

Phasing out tax provisions based on income level is a common feature of the tax code: 

-The child tax credit currently phases out over $75,000 for individuals and $110,000 for joint filers. 

-Itemized deductions currently phase out at $311,300 for families or $259,400 for individuals. 

-Personal exemptions begin phasing out at $261,500 for individuals and $313,800 for families. It fully phases out at $384,000 for individuals and $436,300 for families. 

-The Earned Income Tax Credit begins phasing out at $50,198 for a family of four.

-The American Opportunity Tax Credit is phased out between $80,000 and $90,000 ($160,000 and $180,000 for families).

As noted above, a phase out of the bottom income tax bracket for those within the top bracket was also included in the Reagan Tax Reform Act of 1986. This reform clawed back the 15 percent bracket for those in the top tax bracket.

 

Photo Credit: John Morgan

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25 Conservative Groups Support the “Tax Cuts and Jobs Act”

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Posted by Alex Hendrie on Friday, November 3rd, 2017, 1:44 PM PERMALINK

Today, Americans for Tax Reform, along with 24 other conservative groups, released a letter to the Committee on Ways and Means in support of the “Tax Cuts and Jobs Act.” This pro-growth and pro-family Act will simplify the tax code, reduce taxes for families and businesses, and grow the economy, which will lead to higher wages and new or better jobs for Americans.

The document can be found here, and the full text of the letter is below.

 

25 Conservative Groups Support H.R. 1, The “Tax Cuts and Jobs Act”

The Honorable Kevin Brady
Chairman, Committee on Ways and Means
1102 Longworth Office Building
Washington, D.C. 20515

Dear Chairman Brady:

We write in support of the “Tax Cuts and Jobs Act.” The release of this legislation marks an important step in passing comprehensive tax reform before the end of the year. We urge your committee to swiftly approve this bill and send it to the full House for consideration.

This tax bill is pro-growth and pro-family. While more work remains to be done, this legislation simplifies the code, reduces taxes for families and businesses, and grows the economy. This will lead to higher wages and new or better jobs.

Congress has a rare opportunity this year to reform the broken federal tax code. We stand ready to work with you as the Ways and Means Committee begins marking up the legislation next week.

Sincerely,

Grover Norquist
President
Americans for Tax Reform

Pete Sepp
President
National Taxpayers Union

Jim Martin
Founder & Chairman
60 Plus Association

Phil Kerpen
President
American Commitment

Chrissy Harbin

Vice President of External Affairs
Americans for Prosperity

Andrew F. Quinlan
President
Center for Freedom and Prosperity

Corry Bliss
Executive Director
American Action Network

Lisa B. Nelson
CEO
American Legislative Exchange Council Action

Dan Weber
President
Association of Mature American Citizens

Jeffrey Mazella
President
Center for Individual Freedom

Dan Caldwell
Executive Director
Concerned Veterans for America

Thomas A. Schatz
President
Council for Citizens Against Government Waste

Palmer Schoening
President
Family Business Coalition

Carrie Sheffield
Executive Director
Generation Opportunity

Heather R. Higgins
President and CEO
Independent Women's Voice

Derrick Hollie
President
Reaching America

Jenny Beth Martin
Chairman
Tea Party Patriots Citizens Fund

Matthew Kandrach
President
Consumer Action for a Strong Economy

Katie McAuliffe
Executive Director
Digital Liberty

Nathan Nascimento
Vice President of Policy
Freedom Partners Chamber of Commerce

Michael Needham
CEO
Heritage Action for America

Daniel Garza
President
The LIBRE Initiative

David Williams
President
Taxpayers Protection Alliance

Jason Pye
Vice President of Legislative Affairs
FreedomWorks

Lorenzo Montanari
Executive Director
Property Rights Alliance

Photo Credit: Pastor Chris

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