Alex Hendrie

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 As you move through the committee process this week, it is imperative that this unfair tax is repealed.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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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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ATR Analysis of the Tax Cuts and Jobs Act

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Posted by Alex Hendrie on Thursday, November 2nd, 2017, 4:46 PM PERMALINK

House Ways and Means Chairman Kevin Brady (R-Texas) today released long awaited tax reform legislation, entitled “The Tax Cuts and Jobs Act.” This legislation contains many 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. The release of this bill represents an important step toward achieving pro-growth tax reform in 2017. Chairman Brady and his staff should be commended for releasing this detailed legislation.

Under this proposal, as many as 95 percent of taxpayers could file on a postcard since the majority of taxpayers would no longer itemize and many existing provisions (such as those relating to family and education provisions) would be consolidated and simplified. These reforms would also allow the IRS to be reduced in size and scope.

In addition, the bill will reduce the corporate tax rate from 35 percent to 20 percent effective 2018. This competitive rate will place American businesses on a level playing field with foreign competitors and will ensure the economy grows by at least three percent, as President Donald Trump has promised.

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 2024 - In years 2018 to 2023, 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.

- Repeals numerous distortionary tax credits but preserves the Research and Experimentation (R&E) credit.

- 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 12 percent for cash and 5 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. 

Photo Credit: Pixabay


Tax Reform Bill Abolishes Death Tax

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Posted by Alex Hendrie on Thursday, November 2nd, 2017, 10:40 AM PERMALINK

The House Republican tax reform bill officially abolishes the Death Tax. 

"It is official. The Death Tax will die," said Grover Norquist, president of Americans for Tax Reform. "Date set. No call from the governor." 

Repeal of the Death Tax will spur economic growth. In 2016, the Tax Foundation estimated that repeal of the Death Tax would create 150,000 jobs. Additionally, the Joint Economic Committee reported that the Death Tax has suppressed over $1.1 trillion of capital in the United States’ economy since being introduced. Much of this comes from small businesses, who are the core of America’s economy. This loss of capital ultimately results in fewer jobs and lower wages for American workers.

The Death Tax is bad for jobs and repeal would give families a raise. Again according to the Tax Foundation the Death Tax is an economy killer. They have a macroeconomic “dynamic” model to see what killing the Death Tax would do to the job market. This model projects that killing the death tax would create 139,000 jobs, increase private business hours by 0.1 percent, and increase wages by 0.7 percent.

Numerous studies have found that majority of Americans oppose the Death Tax and support its repeal. For example, a recent report by NPR found that 76 percent of Americans support full, permanent repeal of the Death Tax.  

In addition, the Death Tax contributes a miniscule amount of revenue relative to the size of federal government. In all, it makes up only one half of one percent of all federal revenue. Because the Death Tax is so economically destructive, almost all the revenue lost would be offset by increased economic growth. As noted by the Tax Foundation, repealing the Death Tax would result in $240 billion in lower taxes over a decade. However, the economic growth created by repealing the Death Tax would produce $221 billion in federal revenue because of increased wages and more jobs.

Repeal of the Death Tax pays for itself. The same Tax Foundation report says that the death tax would increase the economy by 0.8 percent (or $137 billion in today’s dollars). Because this additional economic growth would be subject to taxation all its own, it would more than make up for the revenue lost by repealing the Death Tax–it would make up the $20 billion per year, plus yield an extra $8 billion per year on top of that. You heard that right–we’d actually collect more tax revenue if we stopped collecting the Death Tax.

Photo Credit: Arend


A (Properly Designed) Territorial Tax System Will Make America More Internationally Competitive

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Posted by Alex Hendrie, Olivia Grady on Monday, October 30th, 2017, 3:46 PM PERMALINK

Full PDF of this Document Can be Found Here]

 

The United States currently has a worldwide system of taxation where all income of residents is taxed, including foreign income. Because foreign income is often taxed where it is earned as well, this creates a double layer of taxation and subjects businesses to complex rules. Also, because the foreign income is not taxed by the U.S. until repatriated, trillions of dollars of foreign income is stranded overseas and not invested in the U.S.

The majority of countries have fixed these problems, particularly in recent years, by switching to a territorial system where income is taxed in the country it is earned. The U.S. should follow their lead and switch to a territorial system in order to modernize its uncompetitive and outdated system.

However, in transitioning to a territorial system, the U.S. should consider base erosion rules. These rules help determine what income should be taxed, especially with passive income, because international tax is complex with frequent cross-border transactions between multinational corporations and their foreign subsidiaries.

These rules need to be carefully considered though because overly burdensome rules would hurt U.S. businesses and make them less competitive. Other countries have rules on transactions with controlled foreign corporations (typically subsidiaries), dividend exemption systems and limitations on the tax deductibility of interest.

Another approach that some have suggested is a broad based minimum tax on foreign profits, but this might undercut the change to a territorial system.

[Full PDF of this Document Can be Found Here]

Photo Credit: Flickr


Middle Class Families Are The Real Winners In The GOP Tax Plan

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Posted by Alex Hendrie on Monday, October 16th, 2017, 12:00 PM PERMALINK

This article originally appeared in TheHill.com

The unified Republican tax reform framework released last month cuts taxes and increases take-home pay for the middle class while simplifying the code for millions of American families.

First, the framework consolidates the existing seven tax brackets into three — 12 percent, 25 percent, and 35 percent, giving rate reduction to all.

In addition, the plan doubles the standard deduction to $24,000 for a family and $12,000 for individuals, meaning this amount is taxed at zero percent, a significant tax reduction for millions of Americans.

This reform represents drastic rate reduction for the 105 million Americans across the country who took the standard deduction in 2015, according to IRS data. More than seven million taxpayers in Florida, nine million taxpayers in Texas, and three million in Michigan and North Carolina benefit from this tax reduction. These numbers also understate the number of taxpayers who will benefit as the increased standard deduction becomes more attractive for taxpayers.

This is not the only reform in the framework that helps American families. The plan calls for expanding the child tax credit, benefiting more than 22 million families across the country that used this credit in 2015, including more than 500,000 families in New Jersey, 800,000 families in Ohio, and 2.7 million families in California.

Similarly, the repeal of the AMT gives tax relief to almost 4.5 million American families that paid the tax in 2015. More than half a million taxpayers in New York, 250,000 taxpayers in Texas and 166,000 taxpayers in Pennsylvania are hit by the AMT.

Clearly, there are millions of Americans that benefit from the Republican tax reform framework, even before considering other changes in the framework.

Despite this, the plan has been attacked by some who claim the plan doesn’t benefit American families. For instance, a report released by the liberal Tax Policy Center claims that middle-class families will see little if any tax relief, and many will face a tax increase.

However, this analysis fails to account for several factors. First, it assumes many specific details such as the income threshold for the consolidated tax brackets and the size of the child tax credit. For instance, the TPC report assumes a child tax credit of just $1,500, even though two advocates of the child tax credit, first daughter Ivanka Trump and Senator Marco Rubio, have proposed a child tax credit of $2,500.

Even using the biased assumptions of the TPC, the framework is a significant tax reduction for families, as noted by Ryan Ellis writing for Forbes. After modeling three median income American families, Ellis found that each one came out better off from the GOP framework than they currently are.

The TPC study also fails to use any kind of dynamic scoring in its analysis. In large part, the tax reform framework is a jobs bill and many of the reforms to business taxes, like lower competitive rates for businesses and implementation of 100 percent expensing, are aimed at creating new or better jobs for Americans and increasing take-home pay for families through stronger economic growth.

Without dynamic scoring, an analysis of the GOP tax framework is incomplete because it does not account for changes in behavior that result from tax changes. Dynamic scoring has increasingly become the norm as a more accurate way to measure tax changes. While it is far from perfect, dynamic scoring can properly account for changes, like a reduction of the corporate tax.

Many studies have concluded that around 75 percent (and possibly even more) of the corporate tax is borne by labor, meaning a reduction in this tax as the framework proposes, also benefits American workers.

In fact an analysis by the Tax Foundation estimates that going to a 20 percent corporate rate creates the equivalent of 641,000 jobs and boosts income by three percent, or almost $1,700 per family based on 2015 median income. Failing to use dynamic scoring, as the TPC study does, means that the true benefits of the Republican framework are obscured. Any true analysis of the tax plan’s effect on individuals needs to include the benefits business changes have to the economy.

By any measure, the middle class is the winner of this tax reform plan. Under the unified framework released last month, American families will see tax cuts, tax simplification, new or better jobs, and more take-home pay.

 

Alex Hendrie is the director of tax policy at Americans for Tax Reform, a nonprofit group that works to support limited government.

Photo Credit: Greg Nash

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Millions of Taxpayers Benefit from GOP Tax Reform Framework

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Posted by Alex Hendrie on Tuesday, October 3rd, 2017, 12:35 PM PERMALINK

Americans for Tax Reform Foundation today released a study titled “Who Benefits From Simplification Proposed in the Republican Tax Reform Framework?”

The study includes recently released IRS state by state data on the Alternative Minimum Tax (AMT), the Child Tax Credit, and the Standard Deduction.

(The full document can be found here.)

President Donald Trump and Congressional Republicans had four goals in mind when developing this framework: 1. Simplify the tax code; 2. Give American families more take-home pay; 3. Create more jobs; and 4. Bring home trillions of dollars, which are currently overseas.

The study examines the several ways the framework achieves its simplification goal.

Doubling the Standard Deduction

The plan doubles the standard deduction to $12,000 for an individual and $24,000 for a family. This increased deduction simplifies the tax code by encouraging more taxpayers to take the standard deduction, rather than itemizing their deductions, a complex and time-consuming process. In addition, the larger standard deduction reduces the tax burden of many Americans, including all those currently in the 10% bracket to zero.

The number of people this plan will help is large. In Texas, today, over 9 million taxpayers take the standard deduction. In Florida, more than 7 million taxpayers take this deduction, and more than 3 million Americans in North Carolina and Michigan also take it. 

Increasing the Child Tax Credit

The framework also raises the current child tax credit amount of $1,000 per child and folds other deductions into it. While the framework does not specify the level of increase, Senator Marco Rubio and special advisor to the President Ivanka Trump have suggested increasing the cap to $2,500 per child.

According to IRS data, this part of the framework would help more than 22 million Americans who take the child tax credit. In California, alone, almost 3 million taxpayers take the credit, while over a million people in Florida and New York also use it. Finally, over 2 million Texans also take the credit.

Repealing the AMT

The framework repeals the Alternative Minimum Tax (AMT). This repeal simplifies the tax code significantly. Many Americans today are forced to calculate their taxes twice if their income is higher than the AMT threshold. They then pay the higher amount of either the AMT or the normal tax burden. This is expensive and time consuming.

Further, the AMT was only initially passed to make sure 155 high-income Americans paid some federal income tax. Today, almost 4.5 million Americans have to pay the tax. For example, in California, more than 900,000 taxpayers pay the AMT, and more than 500,000 pay it in New York. In Texas, almost 250,000 taxpayers pay this tax, while 166,000 pay it in Pennsylvania.

This study, therefore, finds that many Americans are helped when the standard deduction is doubled, the child tax credit is increased, and the AMT is repealed.

To find out more on who is helped by the framework in your state, please click here.

Photo Credit: Pixabay


ATR Comments on Joint Statement on Tax Reform

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Posted by Alex Hendrie on Thursday, July 27th, 2017, 3:59 PM PERMALINK

Today ATR President Grover Norquist released the following comments regarding the Joint Statement on Tax Reform:

“The joint White House, Senate, and House statement proves that tax reform is on schedule for 2017. Congress and the administration are in agreement on a tax reform plan that includes tax cuts and simplification for individuals, lower rates for all businesses, full business expensing, and territoriality. This bold plan is the key to unlocking at least three percent economic growth, creating millions more jobs, and giving American families lower taxes and more take-home pay.”

Photo Credit: Gage Skidmore

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The Top 20% of Households Pay 88% of Federal Income Taxes

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Posted by Alex Hendrie, John Kartch on Thursday, July 27th, 2017, 1:37 PM PERMALINK

According to the Congressional Budget Office:

 

-The top one percent of households pay 38.3% of federal income taxes and 25.4% of total federal taxes.

- The top 20 percent of households pay 88% of federal income taxes and 69% of total federal taxes.

- The top one percent of households pay an average income tax rate of 23.6% while the middle quintile pays an average income tax rate of 2.6%.

- The top one percent of households pay an average total tax rate of 34% while the middle quintile pays an average total tax rate of over 12.8%.  

- The top 20 percent of households pay an average total tax rate of 26.3 percent while the middle quintile pays an average total tax rate of 12.8%.

The data is shown below:

Photo Credit: Pictures of Money

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