Alex Hendrie

Harris Can’t Explain How She’d Pay for KamalaCare

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Posted by Alex Hendrie on Wednesday, July 17th, 2019, 4:55 PM PERMALINK

In an interview with CNN, Presidential candidate Kamala Harris claimed that she could pay for socialized healthcare on America without tax increases on the middle class.

[Click here for video]

This claim is laughable.

Bernie Sanders, a leading supporter of socialized medicine, which he calls Medicare for All, has admitted that American families will pay more taxes. His plan even includes a new, $3.9 trillion, 4 percent payroll tax on workers. 

This is likely the tip of the iceberg when it comes to tax increases on the middle class because the Sanders proposal only raises $14 trillion, roughly 40 percent of the cost of his Medicare for All Plan which would require $32 trillion and $36 trillion over the next decade.

For her part, Harris has repeatedly proposed repealing the Tax Cuts and Jobs Act, a middle-class tax cut which reduced taxes for an average family of four by $2,000 and reduced overall tax liability by an average of 24.9 percent.

Even assuming Kamala Harris is sincere in her desire to “pay for” socialized healthcare through taxing “the rich,” this would not come close to financing Medicare for All. 

At one point, the CNN host pushed back on the Harris claim that the middle-class won't get hit with a tax hike, and said some people think she's trying to "find money in magical ways."

For instance, a “wealth tax,” a financial transactions tax, a 10 percent surtax on “the wealthy,” a 70 percent top rate, and doubling the tax rate on capital gains would pay for roughly 20 percent of the cost of Medicare for All according to the best-case scenario estimates by the left.

It is also important to note that these estimates assume no negative economic feedback, no changes in behavior, and do not account for any revenue loss from the corresponding other tax increases: 

  • A wealth tax (2% annual tax on $50 million in wealth, 3% annual tax on $1 billion) – a $2.75 trillion tax increase
  • A financial transactions tax (0.1 percent on every transaction) – a $777 billion tax increase
  • A 10 percent surtax on the wealthy ($2.9 mil in income and above) -- an $800 billion tax increase
  • 70 percent top marginal income tax rate – a $353 billion tax increase
  • Doubling tax rates on capital gains -- a $1.5 trillion tax increase

Total: $6.17 trillion (19 percent to 21 percent of the $32 - $36 trillion cost of “Medicare For All.”


Treasury’s GILTI Rules A Positive Step Forward


Posted by Alex Hendrie on Tuesday, July 9th, 2019, 2:19 PM PERMALINK

The Tax Cuts and Jobs Act passed by Republicans at the end of 2017 dramatically improved the U.S. tax code. This law reduced tax rates for individuals, corporations, and small businesses and updated the outdated worldwide system of taxation by moving closer to a territorial system of taxation.

Thanks to these reforms, unemployment is at 3.7 percent, a 50-year low. Wages have grown by 3.1 percent over the past 12 months and GDP has averaged 3 percent quarter-to-quarter growth since the tax cuts were passed.

Despite these gains, there were some unintended outcomes resulting from the tax cuts. For instance, the new GILTI provision (Global Intangible Low-Tax Income) was designed to prevent taxpayers from eroding the U.S. tax base by improperly assigning income to low tax jurisdictions. However, GILTI was based off the pre-TCJA tax system which required companies to allocate a portion of domestic expenses to foreign income for purposes of calculating foreign tax credits.  In the post-TCJA world, this resulted in additional foreign tax liability and meant that GILTI inadvertently taxed high-tax foreign income that was previously exempt from U.S. taxation.

It is clear based on the conference report to the TCJA that Congress never intended to exempt high-tax foreign income:

“The Committee believes that certain items of income earned by CFCs should be excluded from the GILTI, either because they should be exempt from U.S. tax – as they are generally not the type of income that is the source of base erosion concerns – or are already taxed currently by the United States. Items of income excluded from GILTI because they are exempt from U.S. tax under the bill include foreign oil and gas extraction income (which is generally immobile) and income subject to high levels of foreign tax.”

Fortunately, Treasury’s GILTI rules released last month help alleviate this problem.

Under the rules, businesses can apply a high-tax exception that exempts foreign income if this income is subject to foreign taxes above 90 percent of the corporate rate (18.9 percent based on the 21 percent corporate rate).

This is a positive step toward upholding the integrity of the new, territorial tax system and protecting taxpayers from double taxation.

Moving forward, lawmakers should continue examining GILTI and the international provisions of the TCJA so that these provisions do not unduly burden legitimate business activity.


Inflation is A Significant Portion of Capital Gains Taxes

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Posted by Alex Hendrie on Tuesday, July 9th, 2019, 8:00 AM PERMALINK

Recent media reports suggest that the Trump administration is considering using its regulatory authority to index capital gains taxes to inflation through regulation.

This would have clear, immediate economic benefits and will increase the wealth of Americans across the country.

In many cases, inflation comprises a significant portion of the gain when paying capital gains taxes.

[Click here for a PDF of this memo.]

Inflation Comprises 70 Percent of Tax Owed on IBM Shares Purchased in 1970

For example, a taxpayer purchasing one share of IBM stock at the beginning of 1970 would have paid $14.81.

If they sold their share at the beginning of 2019, the total value would be $134.42. This would mean the gain is $119.61 and total tax owed – assuming the 20 percent capital gains tax and the 3.8 percent Obamacare net investment income tax – is $28.47.  

Under an inflation adjustment, the value of a dollar in 1970 equals $6.66 dollars today.

Therefore, if inflation were accounted for, the value of the share would be adjusted to $98.65 and the gain ($134.42 - $98.65) would be just $35.77.

Under this example, tax owed would be $8.51 instead of $28.47 as inflation accounts for 70 percent of the gain.  

Inflation Comprises 64 Percent of Tax Owed Exxon Mobil Shares Purchased in 2000

In another example, a taxpayer purchasing one share of Exxon Mobil stock in 2000 would pay $41.44.

The value of the share at the beginning of 2019 is $73.28 so the gain is $31.84. Tax owed – assuming the 20 percent capital gains tax and the 3.8 percent Obamacare net investment income tax – would be $7.58.

Under an inflation adjustment, the value of a dollar in 2000 equals $1.49 today. Therefore, if inflation were accounted for, the value of the stock would be $61.75. The true, inflation-adjusted gain is just $11.53 and total tax owed is $2.74.

This means that inflation makes up nearly 64% of the increase in value of the share.

 

Inflation Comprises the Entire Gain of Gain of Coca-Cola Shares Purchased in 1998

In some cases, inflation makes up the entire gain and the taxpayer actual has a loss when inflation is accounted for.

A taxpayer that purchases one share of Coca-Cola stock in 1998 would have paid $32.38 per share. Today, that share would be worth $48.13 with a gain of $15.76 and a tax liability of $3.75.

However, because of inflation, the value of a dollar in 1998 is worth $1.56. The inflation adjusted value of the stock is therefore $50.50 and the taxpayer has an inflation adjusted loss of $2.38.


Stock values calculated are adjusted for splits and based on data here: 
https://www.macrotrends.net/stocks/research

Inflation adjustments calculated through Bureau of Labor Statistics inflation calculator: https://data.bls.gov/cgi-bin/cpicalc.pl

 
   
   
 

Photo Credit: Can Pac Swire - Flickr


An Inflationary Rebate Penalty Will Harm Medicare Part D


Posted by Alex Hendrie on Monday, July 8th, 2019, 11:23 AM PERMALINK

The Senate Finance Committee is reportedly making strong progress toward finalizing bipartisan drug pricing legislation.

This is a positive step forward toward lowering healthcare costs and follows recent action by the Senate Health, Education, Labor, and Pensions (HELP) Committee in proposing surprise billing legislation designed to protect patients and make the healthcare system less opaque.

While the interest of lawmakers in reforming the healthcare system is a positive, recent press reports suggest that the Finance Committee is considering including an inflationary rebate penalty to Medicare Part D in their proposal.

Under this plan, a manufacturer would be required to pay a penalty in the form of a rebate if the price of a medicine rises faster than inflation.

This proposal is misguided and threatens to erode the existing, market-based structure of Medicare Part D. Part D works because it facilitates negotiation between pharmacy benefit managers (PBMs), pharmaceutical manufacturers, and pharmacies.

At the core of this program is the non-interference clause which prevents the secretary of Health and Human Services (HHS) from interfering with the robust private-sector negotiations.

An inflationary rebate would undermine non-interference and could disrupt incentives for negotiations between stakeholders. Manufacturers would be on the hook for any price increase in a way that would limit leverage in negotiations.

Private sector negotiations already lower costs for patients and promote access through existing rebates and discounts. These may be crowded out by this new rebate at the expense of consumers. In addition, PBMs already negotiate price protection rebates that establish a private sector cap on the increase of medicines.

The Part D program has a record of success. Since it was first created, federal spending has come in 45 percent below projections - the CBO estimated in 2005 that Part D would cost $172 billion in 2015, but it has cost less than half that – just $75 billion. Monthly premiums are also just half the originally projected amount, while 9 in 10 seniors are satisfied with the Part D drug coverage.

Moving forward, lawmakers should enhance market-based competition in order to put downward pressure on costs and promote increased access. An inflationary rebate penalty would distort the incentives to negotiate efficiencies and would allow the government to set arbitrary prices.


Senate HELP Committee Should Reject Importation Proposals


Posted by Alex Hendrie on Tuesday, June 25th, 2019, 9:00 AM PERMALINK

Later this week, the Senate Health, Education, Labor, and Pensions (HELP) Committee is expected to markup legislation related to surprise medical billing and healthcare transparency.

This markup is a positive step forward in protecting patients, reducing costs, and making the healthcare system less opaque.

During the markup, it is expected that proposals to allow the importation of prescription medicines into the U.S. will be offered.

These amendments should be rejected.

Importation of medicines results in the importation of socialist, market distorting price controls. These importation proposals do not address the root cause of high prices, will allow unvetted, potentially dangerous medicines into the U.S. and will harm American innovation.

Importation Has Long Been Championed by the Far-Left: Importation will allow drugs from countries with socialized medicine is. This policy has long been supported by U.S. Senator Bernie Sanders and opposed by proponents of free markets and limited government. 

While importation may sound like a reasonable free market solution, it is actually a clever ploy to trick proponents of limited government into supporting socialist policies that would jeopardize the development of the next generation of life-saving, life-improving medicines.

Importation is Not the Solution to High Prices: The U.S. represents one-third of the market for medicines in the developed world, but pays for as much as 70 percent of the costs, according to the President’s Council for Economic Advisors.

Importation would do nothing to solve this problem. Instead, it would only siphon off drugs from other markets and exacerbate the true problem – foreign countries freeloading off American innovation.

Other countries have lower prices because they impose heavy handed government price controls and other regulations. This limits access to medicines and suppresses innovation. 

This is not hypothetical – of the 290 new medical substances that were launched worldwide between 2011 and 2018, the U.S. had access to 90 percent. By contrast, the United Kingdom had 60 percent of medicines, Japan had 50 percent, and Canada had just 44 percent. The reference pricing policies used in Europe delay new drugs coming to market by an average of 14 months, according to one study.

Importation Schemes Are Potentially Dangerous to Consumers: The Food and Drug Administration has long expressed concern over allowing the importation of medicines. Agency officials have repeatedly stated there is no way to assure the safety, authenticity, or effectiveness of imported drugs, or whether the drugs are from the country the packaging claims it to be.

Attempting to construct such a system would be a bureaucratic nightmare and will be incredibly costly to taxpayers. This is not a partisan issue -- every single Commissioner of the FDA and every HHS Secretary in the past 18 years has acknowledged allowing importation of price-controlled medicines is dangerous.

Importation Would Threaten the U.S. Role as a Leader of Medical Innovation: The U.S. is a leader in medical development with more than half of pharmaceutical / biotech research being conducted in this country.

This research supports numerous high paying jobs, leading to a stronger economy. Conversely, creating barriers to innovation will threaten these jobs and hurt the economy.

Currently, it costs more than $2.6 billion and takes 10 - 12 years to develop a drug, conduct clinical trials, and obtain Food and Drug Administration (FDA) approval for each drug that makes it onto the market.

This innovation directly benefits the U.S. in the form of high-paying jobs, a stronger economy R&D, and access to more life-saving medicines.


Senate Should Reject Legislation to Weaken Pharmaceutical Patents

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Posted by Alex Hendrie on Tuesday, June 25th, 2019, 9:00 AM PERMALINK

Later this week, the Senate Judiciary Committee is expected to markup several pieces of legislation related to pharmaceutical patents. 

During this markup, it is likely that two pieces of legislation would be considered that will badly damage the U.S. system of property rights and medical innovation.

The first piece of legislation, the “Affordable Prescriptions for Patients Act,” would create unintended consequences to the development of new medicines and the patent system broadly. The legislation as introduced on May 9, 2019 creates two new terms – product hopping and patent thicketing.

These terms were defined so broadly under the legislation that they would impact innovators that play by the rules, not just bad actors:

  • “Product hopping” is defined as attempts to block generic entry through the creation of new healthcare delivery efficiencies. However, in many cases, these efficiencies create substantial value to patients that improve quality of life, are more convenient or efficient to administer, or come with fewer side effects.  They are not intended in any way to block generic competition. Moreover, new innovations do not extend the patent protection for the original product.
  • “Patent thicketing” is defined as efforts by manufacturers to obtain multiple patents in order to create long-term monopolies. This definition is so broad that it ignores the need of manufacturers to protect their innovations with patents. In addition, patents are not given out freely – they are granted by the U.S. Patent and Trademark Office for novel and non-obvious inventions. In addition, patents only provide a right to the claimed invention and once it expires, generic competition can enter the market.
     

Recent media reports indicate that the bill’s sponsor Senator John Cornyn (R-Texas) is revising the legislation to more narrowly target bad actors and protect innovators that are playing by the rules.

According to Bloomberg, the new version may narrow the existing vague standards in order to curb unnecessary lawsuits and may give the Food and Drug Administration, rather than the Federal Trade Commission, jurisdiction over enforcement.

This is a positive development and Senator Cornyn should be commended for his willingness to carefully consider this complex issue.

It is also expected that the “No Combination Drug Patents Act,” introduced by Senator Lindsay Graham (R-SC), will be considered during the markup. This legislation should be rejected. 

Like the Cornyn legislation, this proposal would attempt to curb so-called patent thicketing. This legislation creates a “presumption of obviousness” for new innovations (a new dosage, method of administration, or formulation) to an existing drug or biologic.

This would presume certain new innovations as obvious meaning the patent is not valid. Patents for new improvements such as allowing a medicine to be taken orally instead of injected, or a new version of the drug that may reduce side effects would be denied under this standard. 

It is important to note that where a new innovation qualifies for patent protection, there is no prolonged patent life for the old version and generic entry into the market place is unaffected by the improvement.

While new innovations improve quality of life for patients, the legislation provides no allowance for patent protection.

It is also unclear how this presumption would be enforced or how an innovator could challenge the presumption.

Patents play an important role in the healthcare system and should be protected. Developing new medicines is a costly and uncertain process and the patent protection system is key to ensuring that costs can be recouped and risks can be taken.

Patents are not absolute – while they prevent competitors from bringing an exact duplicate to market, they do nothing to prevent the development of similar medicines. In fact, there are numerous cases of strong competition between different products designed to treat the same disease.

The strong patent system is why the U.S. is a world leader in medical innovation. This benefits the entire country – more than 4.7 million jobs and $1.3 trillion in economic output is supported directly or indirectly by the pharmaceutical industry. 

Disincentivizing medical innovation could lead to long-term shortages, increase costs to the healthcare system, and harm the development of the next generation of medicines including biologics. As lawmakers consider legislation reforming the patent system, they should be sure to consider the immediate and long-term damage these reforms could have on the U.S. patent system.

Photo Credit: Prayitno


ATR Releases Letter Urging Congress to Make the CFC Look-Thru Rule Permanent

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Posted by Alex Hendrie on Monday, June 24th, 2019, 9:59 AM PERMALINK

In a letter to Members of the Senate Finance Committee, ATR President Grover Norquist urged Congress to maintain America’s competitiveness in the global economy by making permanent the Controlled Foreign Corporation (CFC) look-thru rule, which is set to expire on January 1, 2020.

The CFC look-thru rule is a key factor in maintaining a globally competitive tax code. First put in place in 2006, the CFC look-thru rule allows U.S. foreign subsidiaries to avoid double or additional taxation when transferring assets or capital between countries. As the letter explains, allowing this provision to expire will harm American businesses and competitiveness:

“Allowing the expiration of this provision will subject American businesses to additional taxation when they are seeking to redeploy business earnings from one CFC to another. The majority of America’s foreign competitors do not face additional taxation when redeploying capital, so this provision is key to ensuring U.S. businesses are on a level playing field.”

Making the CFC look-thru rule permanent will build on the success of the TCJA, which moved toward a ‘territorial tax system’ where certain types of foreign earnings by American companies were exempt from double taxation.

The full letter can be found here and is below:

Dear Chairman Grassley, Ranking Member Wyden, and Members of the Senate Finance Committee:

I write in support of a permanent Controlled Foreign Corporation (CFC) Look-Thru Rule.

The CFC look-thru rule is a key component of a modern, globally competitive U.S tax system and    should be made permanent, or at the very least, extended. However, if lawmakers fail to act soon, the CFC look-thru rule will expire effective January 1, 2020.

Allowing the expiration of this provision will subject American businesses to additional taxation when they are seeking to redeploy business earnings from one CFC to another. The majority of America’s foreign competitors do not face additional taxation when redeploying capital, so this provision is key to ensuring U.S. businesses are on a level playing field.

The CFC look-thru rule was first enacted in 2006 under IRC section 954(c)(6). It exists as an exception to Subpart F base erosion rules which are designed prevent a business from improperly shifting passive income (rents, royalties etc.) to low tax jurisdictions. Under this provision, any income designated as Subpart F income would be subject to full U.S. corporate tax. The look-thru rule exempts payments from Subpart F when these payments are between two U.S. foreign subsidiaries in different countries.

A permanent CFC look-thru rule compliments the goals of the TCJA. During consideration of the Tax Cuts and Jobs Act in 2017, Congress preserved the CFC-look thru rule in recognition that U.S. tax should not be owed when an American company redeploys capital among foreign subsidiaries. However, lawmakers did not extend the provision, so it will expire effective 2020.

Tax reform made the U.S. more competitive by moving the tax code toward a territorial tax system. Multiple changes were made to the tax code including exempting certain types of foreign earnings from U.S. taxation and implementing several new international tax provisions such as Global Intangible Low- Tax Income (GILTI) and the Base Erosion Anti-Abuse Tax (BEAT).

Under the new system, certain types of foreign earnings repatriated back to the U.S. are exempt from double taxation, while other types of earnings are subject to the 10.5 percent GILTI rate or the 21 percent rate under Subpart F rules.

It is important to note that a permanent CFC look-thru rule does not give taxpayers a windfall or an opportunity to completely avoid taxation on foreign income – while the provision exempts qualifying payments from Subpart F taxation, these may still be subject to base erosion provisions like GILTI.

The CFC look-thru rule is a key pillar of a competitive, territorial tax system and should be made permanent. Failing to act will undermine the gains of the TCJA in making the U.S. tax code more competitive by unnecessarily imposing taxation on U.S. businesses when they seek to deploy capital from one country to another.

Thank you for your consideration. If you have any questions, please contact me or ATR’s Director of Tax Policy Alex Hendrie at 202-785-0266.

Onward,

Grover G. Norquist
President, Americans for Tax Reform

Photo Credit: Guy Middleton


ATR Releases Letter Urging Congressional Action on Healthcare Tax Provisions

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Posted by Alex Hendrie on Monday, June 24th, 2019, 9:43 AM PERMALINK

ATR President Grover Norquist has released a letter to members of the Senate Finance Committee urging Congressional action on a number of healthcare tax provisions.

The letter urges the repeal or delay or certain healthcare taxes, like the Health Insurance Tax (HIT), the Medical Device Tax, and the Cadillac Tax, while calling for other provisions to be extended or made permanent, such as the Medical Expense Deduction and the Paid Family and Medical Leave Tax Credit.

Health Insurance Tax

The Obamacare health insurance tax is a tax on insurance premiums that disproportionately harms workers and small businesses. The letter cites analysis that estimates that implementation of the HIT will raise healthcare costs by $16 billion for families and Medicare advantage seniors in 2020 alone. Half of the HIT revenue is paid by workers making less than $50,000 a year and the tax will hurt up to 1.7 million small businesses. ATR urges the repeal of the Health Insurance Tax.

Medical Device Tax

The Medical Device Tax was a key funding mechanism of Obamacare and imposes a 2.3% excise tax on the sale of commonly used medical devices like X-Ray machines, MRI machines, hospital beds, and more. The tax was in effect from 2013 - 2015, before being suspended by Congress in 2016. When it was in effect, the tax reduced R&D spending by $34 million in 2013 alone, and led to the loss of 28,000 jobs. ATR urges the repeal of the Medical Device Tax.

Cadillac Tax

Another provision of Obamacare, the Cadillac Tax is a 40% excise tax on employer-based coverage plans which exceed $10,200 for individuals and $27,500 for families. This incredibly unpopular provision reduces quality and raises costs for health insurance. This tax applies to nearly every employer-provided plan in the country and will increase deductibles and co-pays for workers. The tax is set to go into effect in 2022. ATR urges the repeal of the Cadillac tax.

Medical Expense Deduction

This long-standing provision of the tax code allows for middle class families to deduct healthcare expenses that exceed a certain percentage of their adjusted gross income (AGI). Before Obamacare, this threshold was 7.5% of AGI and was claimed by more than 10 million families, whose average income was around $53,000 a year.

In 2010, Obamacare raised the threshold to 10% of AGI, and the letter estimates that this cost families $200-$400 per year. The TCJA restored the threshold to 7.5% of AGI for two years, but the 10% threshold was brought back at the start of 2019. ATR urges for a permanent threshold of 7.5% of AGI.

Paid Family and Medical Leave Tax Credit

The Republican Tax Cuts and Jobs Act established an employer tax credit for paid family and medical leave for 2018 and 2019. The credit applies if a company pays their employees at least 50% of wages through the leave. The credit starts at 12.5% of the paid wage and increases up to 25% of the wage if the employer pays full compensation during the leave. ATR urges and extension of the Paid Family and Medical Leave tax credit.

Photo Credit: Pictures of Money


ATR Opposes Retroactive Changes to the Alternative Fuels Mixture Credit

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Posted by Alex Hendrie on Monday, June 24th, 2019, 9:00 AM PERMALINK

ATR President Grover Norquist wrote in opposition to retroactive changes to the Alternative Fuels Mixture Credit in a letter to members of the Senate Finance Committee. 

ATR supports efforts to repeal or make all extenders permanent as part of a broader goal to lower tax rates across the board. When extenders are repealed or made permanent, it creates certainty for taxpayers and businesses.

ATR also believes that extenders should be dealt with prospectively instead of retroactively, because law-abiding taxpayers should not be penalized for following the law based on reasonable statutory interpretations.

[Read the Full Letter Here]

Based on these two principles, ATR opposes retroactively changing the Alternative Fuels Mixture Credit as proposed in The Tax Extender and Disaster Relief Act of 2019 (S. 617). As the letter notes:

“…this legislation retroactively disallows taxpayers blending butane with gasoline from claiming the AFMC. This is bad policy that interferes with ongoing litigation, denies taxpayers due process, and creates potentially arbitrary and unfair outcomes. ATR opposes this change and urges Congress to instead consider changes to the AFMC prospectively.”

Prior to the AFMC’s expiration on December 31, 2017, several taxpayers claimed the credit for blending butane with alternative fuels, and the IRS has denied these claims. Retroactively changing the AFMC to disallow these claims is bad tax policy. As the letter explains:

“Tax policy is based on consistency, certainty, and fairness. Taxpayers routinely make decisions based on a reasonable interpretation of the law with the expectation that the future changes to the law will not be applied looking backwards.

Retroactively changing the tax code punishes taxpayers based on activity that has already occurred.

Legislation that retroactively changes the AFMC would violate this principle by affecting claims from past tax years.

This would also set the precedent that Congress can disallow taxpayers from claiming other provisions in the future and undermines confidence in the tax system.”

AFMC claims by taxpayers that blended butane with traditional fuels are currently being adjudicated in court. By retroactively disqualifying taxpayer AFMC claims, Congress would interfere with ongoing litigation. If Congress disagrees with the outcome of the litigation, it should change the law on a prospective basis.

Instead of interfering with ongoing litigation and retroactively disallowing tax credits to law-abiding taxpayers, Congress should modify the credit prospectively if lawmakers take issue with butane qualifying for the AFMC. Read the full letter here.

Photo Credit: Robert Geiger


Conservative Groups Oppose Any Effort To Roll Back Tax Cuts and Jobs Act

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Posted by Alex Hendrie on Wednesday, June 19th, 2019, 4:00 PM PERMALINK

Americans for Tax Reform has led a coalition of conservative groups in opposition to Democrat efforts to roll back the Republican-passed Tax Cuts and Jobs Act.

The Democrat-controlled House Ways and Means Committee will soon markup legislation that accelerates a scheduled death tax increase by three years. 

Increasing the death tax would be disastrous for small businesses and family farms and small businesses all over the country. 

The Trump tax cuts have had a positive effect on American families and businesses alike. A family of four earning the median income of $73,000 is seeing a federal tax cut of $2,000, and the corporate tax cut has made America competitive on the world stage.

Any effort to roll back the TCJA would undermine these hard-earned gains. Read the full letter here or below:

Dear Chairman Neal and Ranking Member Brady:

We write in opposition to any effort to roll back the Tax Cuts and Jobs Act (TCJA).

The Ways and Means Committee will soon markup legislation that accelerates a scheduled death tax increase by three years.

This would be a mistake – increasing the death tax will disproportionately harm small businesses and family owned farms.

The Tax Cuts and Jobs Act reduced taxes on American families at every income level and for businesses large and small.

A family of four earning the median income of $73,000 is seeing a federal tax cut of $2,000, while overall tax liability has dropped by almost 25 percent, according to a report from H&R Block.

Family businesses are benefiting from the doubled death tax exemption and the creation of the 20 percent small business deduction for businesses organized as passthrough entities.

The TCJA also reduced the federal corporate rate from 35 percent (the highest in the developed world) to 21 percent. This rate reduction has made the U.S. competitive with other countries and has allowed businesses to invest in the economy and in American workers.

The TCJA’s corporate rate cut has directly lowered utility rates in all 50 states. This means lower water, gas, and electric bills for American households. Any increase in the corporate rate would directly raise the cost of utility bills.

The tax cuts have also grown the economy. The unemployment rate is at 3.6 percent --- the lowest rate since 1969 – and has been below 4 percent for 15 consecutive months. Similarly, nominal average wages have grown by at or above 3 percent for the past 10 months. An average of 196,000 jobs have been created each month over the past year.

Rolling back any part of the TCJA undermines these gains. As such, we urge you to reject any proposal to undo the TCJA including a death tax increase.

Sincerely,

Grover Norquist
President, Americans for Tax Reform

James L. Martin
Founder/Chairman, 60 Plus Association

Saulius “Saul” Anuzis
President, 60 Plus Association

Phil Kerpen ​​​​​​​
President, American Commitment

Lisa B. Nelson
CEO, ALEC Action

Brent Wm. Gardner
Chief Government Affairs Officer, Americans for Prosperity

Dan Weber
Founder and President, Association of Mature American Citizens

Ryan Ellis
President, Center for a Free Economy

Andrew F. Quinlan ​​​​​​​
President, Center for Freedom and Prosperity

Jeffrey Mazzella​​​​​​​
President, Center for Individual Freedom

David McIntosh
President, Club for Growth

Matthew Kandrach​​​​​​​
President, Consumer Action for a Strong Economy

Tom Schatz​​​​​​​
President, Council for Citizens Against Government Waste

Katie McAuliffe​​​​​​​
Executive Director, Digital Liberty

Palmer Schoening​​​​​​​
President, Family Business Coalition

Adam Brandon
President, FreedomWorks​​​​​​​

Tim Chapman
Executive Director, Heritage Action

Heather R. Higgins
CEO, Independent Women's Voice

Tom Giovanetti​​​​​​​
President, Institute for Policy Innovation

Seton Motley
President, Less Government

Pete Sepp​​​​​​​
President, National Taxpayers Union

Lorenzo Montanari ​​​​​​​
Executive Director, Property Rights Alliance

Karen Kerrigan
President & CEO, Small Business & Entrepreneurship Council

Tim Andrews
Executive Director, Taxpayer Protection Alliance

Photo Credit: kidTruant - Flickr


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