Alex Hendrie

Reforming the Sugar Subsidy Will Strengthen the Farm Bill

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Posted by Alex Hendrie on Thursday, May 10th, 2018, 3:00 PM PERMALINK

Next week, the House of Representatives is expected to vote on H.R. 2, the Agriculture and Nutrition Act of 2018.

The legislation includes important reforms to the Supplemental Nutrition Assistance Program (SNAP) that ensures the program promotes upward mobility while simultaneously protecting the most vulnerable in our society. 

However, in its current form, the Farm Bill fails to address other market distorting subsides. One key way lawmakers can improve the bill is by including reform to the sugar program.

For too long, American consumers, workers and taxpayers have been harmed by sugar subsidies. Members of Congress have an opportunity to reform this archaic program within the farm bill by supporting an amendment by Representative Virginia Foxx (R-N.C.).

Enacted in 1934, the U.S. sugar program includes numerous market distorting tools to inflate the price of sugar including import quotas, loans, marketing allotments, price supports, and tariffs.

Because of this program, Americans pay almost twice the world price for sugar, raising prices for businesses and consumers.

Every year, Americans spend between $2.4 and $4 billion more on sugar than market prices dictate because of sugar subsidies. At the same time, taxpayers have been forced to foot the bill for millions of dollars in bailout money for loan defaults and other subsidies.

This program has also cost more than 123,000 manufacturing jobs since 1997, and the Department of Commerce estimates that every sugar-producing job protected through high U.S. sugar prices has come at the cost of three manufacturing jobs lost.

Support for reform is bipartisan and bicameral. Legislation to reform the sugar subsidy, the Sugar Policy Modernization Act of 2017 (H.R. 4265/S. 2086), has been introduced in the House by Representatives Foxx and Danny Davis (D-IL) and in the Senate by Jeanne Shaheen (D-NH) and Pat Toomey (R-PA) in the Senate.

  • First, the amendment will repeal import quotas that raise the price of sugar. 
  • Second, the amendment will grant the Department of Agriculture more flexibility over administering the sugar program.
  • Third, taxpayers would no longer be responsible for loan defaults by large sugar processors.
  • Lastly, marketing allotments (the amount of sugar the government tells beet processors and cane mills they can produce) and the Feedstock Flexibility Program (which requires the government to buy sugar surpluses and sell it to ethanol plants at lower prices) would both be repealed.

Photo Credit: Flickr


Congress Should Pass Trump’s Rescissions Package


Posted by Alex Hendrie on Thursday, May 10th, 2018, 1:14 PM PERMALINK

Earlier this week, President Trump unveiled a proposal to rescind $15 billion in previously appropriated, but never spent funding. This measure, H.R. 3, the Spending Cuts to Expired and Unnecessary Programs Act, is an important step toward spending reduction. All Members of Congress should support this legislation.

[See ATR President Grover Norquist Discuss Rescissions on Fox Business Here]

Under the Congressional Budget and Impoundment Control Act of 1974 (ICA), the President has the authority to request Congress act on rescinding previously appropriated funding. Under the ICA, Congress has 45 days to act and any proposal is subject to expedited legislative procedures.

The ICA has been used by Democrats and Republicans in the past to rescind funding that has been allocated but never used. Trump’s $15 billion rescissions package is the largest in history. Proposed rescissions include:

  •  $4.3 billion from the Advanced Technology Vehicles Manufacturing Loan Program. These funds were obligated in 2011 but were never used.
  • $523 million from the Title 17 Innovative Technology Loan Guarantee Program. This program lapsed in 2011.
  • $5.1 billion from Children Health Insurance Fund and $1.8 billion from the Child Enrollment Contingency Fund. Neither proposal would impact children on the program.
  • $800 million from Center for Medicare and Medicaid Innovations.
  • $252 million from the Ebola response.
  • $500 million from the Farm Security and Rural Investment Programs.
  • $157 million from the Watershed and Flood Prevention Operations.
  • $148 million from Animal and Plant Health Inspection Service.
  • $133 million from Railroad Unemployment Insurance Extended Benefits.

A Vote for the Farm Bill is A Vote for Welfare Reform and Upward Mobility

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Posted by Alex Hendrie, Tom Hebert on Thursday, May 10th, 2018, 9:00 AM PERMALINK

The Farm Bill Strengthens the Safety Net, Encourages Work, Promotes Upward Mobility, and Ensures Taxpayer Funds Are More Responsibly Spent

Next week, Congress is expected to take up H.R. 2, the Agriculture and Nutrition Act of 2018.

This legislation includes important reforms to the Supplemental Nutrition Assistance Program (SNAP) and represents an important step forward in enacting welfare reform.

The 2018 farm bill includes important reforms to the SNAP program that will help ensure the program is achieving the goal of promoting upward mobility while simultaneously protecting the most vulnerable in our society. For instance:  

  • The farm bill requires requiring individuals on SNAP that are between ages 18 to 59 to work and/or participate in employment training for at least 20 hours per week (individuals with a disability, are pregnant, or are caretakers are exempt from this requirement).
  • The farm bill increase funds available for a work training program for SNAP recipients from $90 million to $1 billion per year. The plan also mandates that states provide a training slot to every work-eligible SNAP recipient. Estimates show that this would free one million Americans from government dependency over the next decade.
  • The farm bill establishes a Duplicative Enrollment Database to make sure recipients aren’t receiving SNAP benefits from multiple states.
  • The farm bill introduces a pilot program where food stores provide bonuses to SNAP households that buy fruits, vegetables and milk.

There is a clear need to reform the safety net. SNAP is just one example of the failure of government to provide a welfare program that works.

President Ronald Reagan famously said: “The Federal Government declared a war on poverty, and poverty won.” Unfortunately, this statement still rings true over three decades later.

Despite the trillions of dollars spent on welfare programs since President Johnson’s Great Society plan was enacted, the poverty rate in 2014 (14.8 percent) is actually worse than it was in 1966 (14.7 percent). Programs are still not helping Americans get out of poverty. 34 percent of Americans raised in the bottom fifth of income are still trapped there as adults.

Meanwhile, the costs of running these programs have skyrocketed. According to CBO, federal spending on welfare has nearly doubled between 2006 ($369 billion) to 2016 ($744 billion). Without reform, CBO projects that federal government spending on welfare will exceed $1 trillion by 2026.

Throwing billions of dollars at the problem has clearly failed to solve the problem. Instead, expensive, poorly-run government programs have kept low-income Americans from achieving the American dream for far too long.

In 2016, the Mercatus Center reported that 18 percent of Americans receive food stamps. Yet, only 1 percent of American households likely need them. As a result, the program costs about $70 billion per year. Further, there are currently more than 20 million able-bodied adults on SNAP, even though there are 6 million open jobs across America.

Interestingly, Governor Sam Brownback implemented similar work requirement reforms (and time limits) in the Kansas food stamp program in 2013.

The Foundation for Government Accountability studied the results in 2016 and found that the reforms were a success. Before the Kansas food stamp reforms, 1 in 5 able-bodied food stamp recipients worked, and 93 percent of them were in extreme poverty. After the reforms, 75 percent of the able-bodied adults in the program dropped out. 60 percent of able-bodied adults that no longer needed food stamps found jobs within 12 months. Further, their incomes rose by about 127 percent per year, and average income for able-bodied working adults is now above the poverty line. 

On the federal level, Kansas-style welfare reform centered on upward mobility would help low-income Americans move up the economic ladder by incentivizing work.

The Agriculture and Nutrition Act is far from perfect and lawmakers should continue to strengthen the bill by offering other common sense reforms, such as fixing the outdated, wasteful sugar subsidy.

Even so, the welfare reforms including in the Farm Bill represent a step in the right direction toward reducing poverty, encouraging work, fostering upward mobility, and ensuring taxpayer dollars are responsibly spent.

Photo Credit: Carrie Larimer


Rep. Grothman’s Capital Gains Tax Hike Bill Undermines Tax Reform Gains & Economic Growth


Posted by Alex Hendrie on Monday, April 30th, 2018, 9:00 AM PERMALINK

One of the biggest gains from the Tax Cuts and Jobs Act was the increased incentives the bill created for decisions that spur economic growth.

Most notably, the bill moved toward a system of immediate expensing of capital investments, which will encourage companies to increase their investment in the economy. In turn, this will result in the long-term creation of new or better jobs and higher wages.

Ahead of the 2018 midterms, Democrats are running on a platform that would wipe out these gains. Senate Democrats have already proposed a $1 trillion tax hike (1,000,000,000) including several that would harm economic growth such as an increase in the death tax, higher taxes on businesses, and higher taxes on capital gains.

Unfortunately, Democrats are not the only ones pushing higher taxes in this space. Regrettably, Congressman Glenn Grothman (R-Wis.) is joining with Democrats in pushing for higher taxes on carried interest capital gains. This is disappointing because Rep. Grothman is otherwise a strong supporter of pro-growth tax reform and middle-class tax reduction.

A tax increase on carried interest capital gains is bad policy and would harm the economy. It is widely accepted that taxes on capital gains suppress growth and the creation of wealth.

Capital gains taxes are an additional layer of taxation in the code. Capital gains income has already been taxed at the individual level prior to reinvestment in the economy. This double taxation discourages savings, suppresses productivity, and discourages investment. It acts as a barrier to job creation, wage growth, and economic growth.

Simply, higher taxes on capital gains are higher taxes on investment, which negatively impacts pension funds, retirement savings, charities, and colleges that depend on robust investment in order to meet savings goals. Small businesses would also be badly affected, as investment money available from these partnerships dries up.

In addition to harming the economy, an increase in carried interest capital gains is bad policy. There is no difference between carried interest and any other type of capital gain, so differential tax treatment makes no sense.

Carried interest is simply the investor’s share of partnership income they receive for providing expertise on investment decisions. All taxpayers involved in the partnership – those providing expertise and those providing capital – are taxed the same.

The tax code rightly treats any income earned in this case as partnership income, meaning  taxation flows through to individual taxpayers. The tax code also rightly treats this income as capital gains income as it is earned through long-term investment, not as ordinary income.

Undermining either of these two principles undermines the existing tax code as a whole by opening the door to arbitrarily higher taxes.

The tax treatment of carried interest capital gains was settled during the tax reform debate last year. The Tax Cuts and Jobs Act was developed under an extensive regular order process that involved six years of debate and more than 40 hearings in the House Ways and Means Committee.

After significant debate, lawmakers chose to maintain the tax treatment of carried interest as partnership income that is treated as a capital gain.

Choosing to increase taxes on carried interest capital gains by arbitrarily changing the tax treatment of this type of income would undermine the treatment of all capital gains and erode the gains of the Tax Cuts and Jobs Act.


The RSC Budget Proposal Builds on the Success of Tax Reform

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Posted by Alex Hendrie, Tom Hebert on Friday, April 27th, 2018, 11:30 AM PERMALINK

Republican Study Committee (RSC) Chairman Mark Walker (R-NC) and RSC Budget and Spending Task Force Chairman Tom McClintock (R-CA) released the RSC’s budget proposal this week. The budget, entitled “A Framework For Unified Conservatism,” enacts important policies like free market health care reform and responsible entitlement reform. 

Most importantly, the budget calls for pro-growth tax reform and making middle class tax cuts permanent. Chairman Walker and Chairman McClintock should be commended for this conservative budget outline.

The RSC budget calls for making the individual tax cuts from the Tax Cuts and Jobs Act permanent. Under the TCJA, 90 percent of wage earners are seeing increased take-home pay. A family of four earning the median income of $73,000 will receive a tax cut of more than $2,000 this year. Similarly, a single parent with one child earning $41,000 per year will see tax reduction of 73 percent, resulting in a $1,304 tax cut.

Unfortunately, arcane Senate procedure and the refusal of Democrats to support tax cuts meant that the individual provisions in the Tax Cuts and Jobs Act could not be made permanent. If Congress does nothing, these important tax cuts will sunset in 2026.

The RSC budget would make these important provisions permanent:

  • The doubling of the standard deduction to $12,000 and $24,000 for a family. This provision is a $690 billion tax cut between 2018 and 2025. If allowed to sunset, the standard deduction would revert to $6,000 for individuals or $12,000 for a family.
  • The reduction of nearly every individual income tax bracket, a tax cut of $1.2 trillion between 2018 and 2025.
  • The doubling of the child tax credit to $2,000 Child Tax Credit. This is a $533 billion tax cut between 2018 and 2025. If allowed to sunset, the CTC would revert to $1,000 per child.
  • A 20% deduction for pass-through businesses (LLCs, partnerships, S-corporations etc.). This is an 88 billion tax cut between 2018 and 2025.
  • The doubling of the death tax exemption to $11 million. This is a $69 billion tax cut between 2018 and 2025. If allowed to sunset, the exemption would revert back to $5.49 million, meaning more taxpayers, including many family owned businesses, would be hit by the death tax.
  • An increase in the threshold that the Alternative Minimum Tax hits individuals so that it kicks in at $1 million of annual income. This is a tax cut of $572 billion between 2018 and 2025. If this sunsets, millions of families will be hit by the AMT.

The RSC budget also calls for making full business expensing permanent ensuring strong economic growth continues. Prior to passage of the TCJA, businesses were forced deduct, or “depreciate” the cost of any new investments and assets over multiple years depending on the asset they purchase, as dictated by arbitrary IRS rules. Tax reform implemented immediate, full business expensing for five years with a phase-out of the provision over the next five years.

Expensing allows businesses to immediately deduct the cost of new equipment, and so encourages businesses to make more investment in the U.S. economy. Full expensing gives businesses a zero percent rate on the cost of new investments, which incentivizes more capital flowing into the economy, leading to stronger growth. 

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

Lastly, the RSC budget calls for entitlement reforms that ensure these programs grow at a sustainable rate. If entitlement spending is not reined in, these programs will continue to add hundreds of billions to the national debt each year. Without reform, the Social Security Trust Fund will be completely depleted by 2035 and the Medicare Trust Fund will be empty by 2029. Modernizing Social Security and Medicare are imperative in order to save the programs.

This RSC budget makes multiple changes to Social Security, starting with implementation of the Social Security Reform Act to achieve long-term sustainable solvency. Second, the plan gradually phases in an increase of the eligibility age to 70 to keep up with a rising mortality rate. Third, the framework modernizes the benefit formula for new retirees, provides additional support for the most vulnerable, reduces the barriers to staying active in retirement, and prohibits overpayment debt discharge.

The framework also implements needed reforms to Medicare. First, the plan reduces costs for beneficiaries by implementing premium support in 2023 while including traditional fee-for-service as an option. Second, the framework phases in an increase in the eligibility age to account for longer lifespans. The plan combines Parts A & B, reforms Medigap, and phases in increase premiums and means testing.

These reforms will place important programs on a sustainable path, ensuring they continue to serve those in need.

Photo Credit: Flickr


Senator Cruz Introduces Bill To Make Individual Tax Cuts Permanent

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Posted by Alex Hendrie on Monday, April 23rd, 2018, 9:30 AM PERMALINK

On Tax Day, Senator Ted Cruz (R-Texas) introduced S.2687, legislation to make the individual tax cuts from the Tax Cuts and Jobs Act permanent.

This bill would ensure that 90 percent of American wage earners continue to see tax reduction after 2025. All Senators should support this legislation.

Because of tax reform, a family of four earning the median income of $73,000 will receive a tax cut of more than $2,000 this year. Similarly, a single parent with one child earning $41,000 per year will see tax reduction of 73 percent, resulting in a $1,304 tax cut. Between 2018 and 2025, American families and individuals will see tax reduction totaling $1.17 trillion because of the Tax Cuts and Jobs Act.

Unfortunately, Senate procedure and the refusal of Democrats to support tax cuts meant that the individual provisions in the Tax Cuts and Jobs Act could not be made permanent. If Congress does nothing, these important tax cuts will sunset in 2026.

Senator Cruz’s legislation would make this tax reduction permanent including:

  • The doubling of the standard deduction to $12,000 and $24,000 for a family. This provision is a $690 billion tax cut between 2018 and 2025. If allowed to sunset, the standard deduction would revert to $6,000 for individuals or $12,000 for a family.
  • The reduction of nearly every individual income tax bracket, a tax cut of $1.2 trillion between 2018 and 2025.
  • The doubling of the child tax credit to $2,000 Child Tax Credit. This is a $533 billion tax cut between 2018 and 2025. If allowed to sunset, the CTC would revert to $1,000 per child.
  • A 20% deduction for pass-through businesses (LLCs, partnerships, S-corporations etc.). This is an 88 billion tax cut between 2018 and 2025.
  • The doubling of the death tax exemption to $11 million. This is a $69 billion tax cut between 2018 and 2025. If allowed to sunset, the exemption would revert back to $5.49 million, meaning more taxpayers, including many family owned businesses, would be hit by the death tax.
  • An increase in the threshold that the Alternative Minimum Tax hits individuals so that it kicks in at $1 million of annual income. This is a tax cut of $572 billion between 2018 and 2025. If this sunsets, millions of families will be hit by the AMT.

As noted by Senator Cruz, support for making this tax reduction permanent should be bipartisan. Even socialist Senator Bernie Sanders (I-VT) has voiced support for this idea:

“The weeks after the tax bill passed, Bernie Sanders was on one of the Sunday shows. Jake Tapper asked him, said, "Listen, virtually every middle class taxpayer in America is getting a tax cut as a result of this. Isn't this a good thing?" Bernie said, "Yes, yes it's a wonderful thing. But the problem is it isn't permanent.

“Well I saw that and promptly tweeted out a reply.

“Oddly enough, I haven't heard back from Bernie. It's been crickets chirping.

“But we ought to follow through to make the individual tax cuts permanent. We ought to follow through to make expensing permanent.

“We ought to follow through to make the small business tax cuts permanent. We ought to keep moving forward and prioritizing jobs, jobs, jobs because that's the priority of the American people.”

Photo Credit: Gage Skidmore


Cruz Introduces Bill To End Inflation Tax

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Posted by Alex Hendrie on Friday, April 20th, 2018, 12:18 PM PERMALINK

Sen. Ted Cruz (R-Texas) has  introduced S.2688, the “Capital Gains Inflation Relief Act of 2018.”

This key legislation, co-sponsored by Sen. Jim Inhofe (R-Okla.), would end the taxation of inflationary gains by indexing the calculation of capital gains taxes to inflation. ATR urges all Senators to support the bill.

Under current law, the capital gains tax fails to account for gains that are based on inflation. This unfairly exposes taxpayers to additional taxation. For example, an investor makes a capital investment of $1,000 in 2000 and sells that investment for $2,000 in 2017 will be taxed for a $1,000 gain at a top capital gains tax rate of 23.8 percent. After adjusting for inflation, the “true gain” is much lower – just $579. (1,000 in 2000 - $1,421 in 2017).

According to a 2013 analysis by the Tax Foundation on individual capital gains taxes, the average effective rate excluding gains from inflation between 1950 and 2012 was 42.5 percent, nearly twice today’s 23.8 percent top capital gains tax rate.

As noted by Senator Cruz, indexing capital gains corrects a flaw in the tax code and will lead to stronger economic growth, higher wages, and the creation of new and better jobs:

“Indexing capital gains for inflation means you would be taxed on actually what you've gained, on the increase above and beyond inflation. It is a pro-growth, pro investment policy decision because what it would do is encourage people to put more capital, to invest more capital in businesses. When you're investing more capital in businesses, it means you're hiring more people. It means you're buying more equipment. It means you're raising wages. You're driving economic growth.”

At the same time Senator Cruz is working to get the bill through congress, the inflation tax can and should be ended through the Treasury Secretary’s regulatory authority.

There is strong legal precedent and historic support from Congress and within the administration for having the Treasury Department indexing capital gains taxes to inflation through a regulation:

  • The Treasury Department has the legal authority to index capital gains taxes to inflation, as noted by Lawyers Charles J. Cooper, Michael A. Carvin and Vincent Colatriano in a 1993 legal memo published in Virginia Tax Review, and again by Cooper and Colatriano in a 2012 legal memo published in the Harvard Journal of Law and Public Policy.     
  • Larry Kudlow, the Director of the National Economic Council, supports using Treasury’s regulatory authority to index capital gains taxes to inflation. In a CNBC op-ed published on August 11, 2017, he described indexation as a way to promote economic growth and prosperity:
    • President Trump's absolutely best economic policy so far has been his relentless rampage against onerous, burdensome, costly, prosperity-killing regulations on business. And the taxation of inflationary capital gains fits right in there. It is an unfair and misguided policy that punishes risk and success. The president should use his executive authority — as he so often has to drain the swamp — to remove this prosperity-killing practice.
  • Current and former members of Congress, led by Vice President Mike Pence, support indexing capital gains taxes to inflation. Pence introduced legislation in 2007 with 88 co-sponsors including now-Office of Management and Budget Director Mick Mulvaney, House Speaker Paul Ryan (R-Wis.) and House Ways and Means Chairman Kevin Brady (R-Texas).
  • Economist Richard Rahn voiced support for indexation in a Washington Times op-ed published on April 9, 2018. Rahn stated that indexation would “spur economic growth and job creation, increase government revenues, and most importantly stop the immoral practice of taxing government-caused inflation.”

Photo Credit: Gage Skidmore


The House Should Take Up the Preventing IRS Abuse and Protecting Free Speech Act

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Posted by Alex Hendrie on Friday, April 20th, 2018, 10:54 AM PERMALINK

This past week, the House of Representatives passed multiple pieces of legislation to reform and update the IRS. Among the reforms is a proposal that strengthens identify theft protections for children, legislation that updates the IRS’ outdated tech, and a bill overhauling the agency’s appeals processes.

While each of these proposals represents a step in the right direction, there remains common sense IRS reforms that Congress should pass. One proposal that deserves prompt floor consideration is H.R. 4916, the Preventing IRS Abuse and Protecting Free Speech Act, sponsored by Congressman Peter Roskam (R-Ill.).

This Preventing IRS Abuse and Protecting Free Speech Act protects non-profits from IRS overreach by prohibiting the agency from collecting the identity of donors who contribute to these organizations.

Currently, the IRS requires non-profits to submit a Schedule B form, listing the names and addresses of their donors. The agency does not use this sensitive information for any purpose, but collects it anyway. In fact, IRS officials have publicly doubted the need for Schedule B forms given the risk of this information becoming public.

Instead of serving a legitimate purpose, the Schedule B form creates needlessly compliance costs on both non-profits and the IRS. At its most extreme, the form gives unelected bureaucrats a tool to chill political speech.

This concern is not hypothetical. There have been several cases where agency officials have leaked the sensitive information contained on Schedule B forms for political purposes, like when the Obama IRS leaked the schedule B of the National Organization for Marriage.

There is a clear need to reform the IRS to better protect free speech. There have been well documented cases of the agency targeting political speech under the Obama Administration, most notably when IRS employee Lois Lerner led an effort to deny non-profit status to conservative organizations. Years after this scandal, it is unclear whether sufficient protections are in place.

For instance, a 2016 report by the Government Accountability Office warned that the IRS may still be unfairly targeting Americans based on political beliefs. As the report noted, serious internal control flaws mean the IRS may still be unfairly selecting Americans for an audit “based on an organization’s religious, educational, political, or other views.”

Protecting free speech should be a bipartisan issue. Opposing this measure gives the IRS – regardless of whether it is run by Democrats or Republicans – a tool to chill and intimidate political speech.

The House should swiftly take up and pass Congressman Roskam’s Preventing IRS Abuse and Protecting Free Speech Act.

Photo Credit: Wikimedia Commons


8 Facts About the GOP Tax Cuts That Dems Don’t Want to Talk About

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Posted by Alex Hendrie on Tuesday, April 17th, 2018, 3:34 PM PERMALINK

[For a PDF version, please click here]

1. Thanks to Tax Reform, 90 Percent of Wage Earners Are Seeing Increased Take-home Pay:

  • A family of four with annual income of $73,000 (median family income) will see a tax cut of more than $2,058, a 58 percent reduction in federal taxes.
     
  • A single parent with one child with annual income of $41,000 will see a tax cut of $1,304, a 73 percent reduction in federal taxes.
     
  • Married small business owners with annual income of $100,000 will see a tax cut of $2,603, a 24 percent reduction in federal taxes.

 

2. Americans at Every Income Level Are Seeing Significant Tax Reduction Because of the Tax Cuts and Jobs Act:

  • 90 percent of taxpayers with annual income of between $40,000 and $64,000 will see an average federal tax cut of $810 in 2018.
  • 91 percent of taxpayers with annual income between $64,000 and $108,000 will see an average federal tax cut of $1,400 in 2018.
     
  • 87 percent of taxpayers with annual income between $108,000 and $232,000 will see an average federal tax cut of $2,710 in 2018.
     

3. Thanks to Tax Reform, Families and Individuals Across the Country Will See A Fairer, Simpler Tax Code Starting 2018:

  • The Tax Cuts and Jobs Act doubled the standard deduction for an individual from $6,000 to $12,000 and for a family from $12,000 to $24,000. 105,055,150 families and individuals took the standard deduction in 2015.​
    • Because of tax reform, 93 percent of filers will now take the standard deduction, resulting in significant simplification of the tax code.

 

  • The Tax Cuts and Jobs Act raised the threshold of the Alternative Minimum Tax so fewer taxpayers are forced to comply with the provision. 4,464,430 families and individuals paid the Alternative Minimum Tax in 2015.
     
  • The Tax Cuts and Jobs Act doubled the child tax credit from $1,000 to $2,000 per child. 22,324,780 families took the Child Tax Credit in 2015.

 

4. Thanks to Tax Reform, American Families Will See Relief from the Obamacare Individual Mandate Tax Penalty.

  • Obamacare imposed a tax penalty of $695 for an individual and $2,085 for a family of four for failing to buy “qualifying” health insurance as defined by the federal government. The Tax Cuts and Jobs Act repeals this unfair tax.
     
  • The Obamacare individual mandate tax penalty is one of the most regressive taxes in the code as it disproportionately impacts low and middle-income families:

 

5. Business Confidence Is at an All-Time High Following Tax Reform:

  • Small business optimism has been at an all-time high since early 2017:
    • According to a survey by the National Federation for Independent Businesses, small business owners are seeing historically high business conditions and expected sales. Hiring and spending on new capital are also extremely high levels.
       
  • Optimism amongst manufacturers is at an all-time high because of tax reform:
    • According to a survey by the National Association of Manufacturers, 93.5 percent of manufacturers registered a positive outlook in the first quarter of 2018, following 94.6 percent positive outlook in December 2017.
    • Small manufacturers recorded a 94.5 percent positive outlook in Q1 of 2018.
       
  • Optimism amongst middle market businesses is at an all-time high:
    • 73 percent of middle market executives expect a stronger economy, according to the RSM US Middle Market Business Index.
    • 58 percent of middle market companies plan to hire more workers and 63 percent plan to increase wages in the Q2 or Q3 of 2018.
    • 45 percent have already increased hiring and almost 50 percent have increased wages in Q1 of 2018.

 

6. Businesses Large and Small Have Responded to Tax Reform by Announcing Pay Raises, Bonuses, 401(k) Match Increases, Increased Charitable Contributions and Workforce Development Programs. For Example:

  • Anfinson Farm Store – a family owned business in Cushing, Iowa (population 223) – has given its employees a $1,000 tax reform bonus and raised wages by 5 percent. 
     
  • AT&T has provided 200,000 U.S. employees with a $1,000 tax reform bonus. 
     
  • Kentucky-based Turning Point Brands, Inc. will give 107 employees a $1,000 tax reform bonus.
     
  • Wichita Railway Services is giving its five employees tax reform bonuses of between $3,000 and $6,000.
     
  • Boeing announced $300 million to be spent on charitable donations, workforce development and infrastructure improvement because of tax reform.
     
  • Five Senses Spa, Salon and Barbershop based in Peoria, Illinois gave $500 tax reform bonuses to its 20 employees.
     
  • Walmart is increasing its base employee wage to $11 per hour, is giving tax reform bonuses of up to $1,000, is expanding maternity and parental leave and giving a $5,000 allowance for adoption expenses.
     
  • Heating and cooling company AAON — with facilities in Tulsa, Oklahoma and Longview, Texas — gave its 2,000 employees a $1,000 tax reform bonus.
     
  • Tampa-based Spellex Corporation gave its 26 employees $1,000 tax reform bonuses.
     
  • Comcast is giving $1,000 tax reform bonuses to 100,000 employees.
     
  • Visa is doubling its 401(k) employee contribution match to a maximum of 10 percent of employee pay because of tax reform.

 

7. Utility Companies are Responding to Tax Reform by Lowering Rates by $4.5 billion for 92 million customers. For example:

  • Illinois-based ComEd is passing $200 million worth of savings to consumers due to tax reform.
     
  • Baltimore Gas & Electric is passing $82 million in annual savings to customers due to tax reform.
     
  • Arizona Public Service has requested a $119 million bill reduction for customers due to tax reform.
     
  • Consumers Energy based in Jackson, Michigan will lower customer bills by approximately $200 million because of tax reform.
     
  • Georgia Power will provide $1.2 billion in benefits because of tax reform.
     

8. Democrats Have Proposed At Least One Trillion Dollars in Higher Taxes Including:

  • A $139 billion income tax increase on individuals.
     
  • An increase in the Alternative Minimum Tax, a tax hike of $429 billion.
     
  • An increase in the Death Tax totaling $83 billion.
     
  • A $359 billion tax increase on businesses.

 

[For a PDF version, please click here]

Photo Credit: Gage Skidmore

More from Americans for Tax Reform


ATR Supports H.R.5281, the "Global Trade Accountability Act"

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Posted by Alex Hendrie on Monday, March 19th, 2018, 10:38 AM PERMALINK

Americans for Tax Reform released a letter last week in support of H.R. 5281, the "Global Trade Accountability Act." This legislation, sponsored by Congressman Warren Davidson (Ohio-08), reasserts Congressional oversight and accountability over trade-related decisions made by the Executive Branch. 

While presidents are granted the power to negotiate international trade agreements, this historically has not included the authority to impose tariffs. Over the years, Congress has ceded its authority to the president by allowing the executive to raise tariffs and restrict imports unilaterally.

Tariffs are taxes, and the new tariffs posed by the Trump Administration threaten to undercut the gains from recent tax reform legislation. It is more important than ever that Congress reasserts its authority over trade policy to avoid new tariffs that will damage the U.S. economy. 

The full letter can be viewed here and below: 

Dear Congressman Davidson:

I write in support of H.R.5281, the Global Trade Accountability Act. This legislation reasserts Congressional oversight and accountability over trade-related decisions made by the Executive Branch. All members of Congress should support your important legislation.

Specifically, the Global Trade Accountability Act requires the president to secure a joint resolution from Congress before any “unilateral trade action” – including tariffs – can take effect.

While presidents are granted the power to negotiate international trade agreements, this historically has not included the authority to impose tariffs.  Instead, the power to impose tariffs and regulate foreign commerce is granted to Congress under Article 1, Section 8 of the United States Constitution.

Over the years, Congress has ceded its authority to the president by allowing the executive to raise tariffs and restrict imports unilaterally.  Most recently, President Trump proposed imposing tariffs on steel and aluminum as a negotiating tactic to ensure American businesses and families have better trade deals.

While this is the right goal, imposing tariffs is the wrong solution. Tariffs are taxes, and increasing them will, on net, hurt American manufacturing, its workers and their families.

In the case of steel and aluminum tariffs, while there will be some winners – in this case the domestic industries that manufacture steel and aluminum – there will be far more losers. Every industry that uses these products as an input will see higher prices, leading to increased costs for consumers, and lower wages and fewer jobs for American workers.  Ironically, countries without these tariffs will be advantaged over the U.S.

Imposing tariffs risks starting a civil war within the U.S. economy by picking winners and losers among American workers and businesses. 

Consumers will be clear losers as they will see higher prices on everyday products like cars, soda, and beer. But the real trade war we have to fear is the war between different sectors of the U.S. economy. 

Tariffs also threaten to undercut the increased wages and greater take-home pay coming from tax reform. Because of tax reform, ninety percent of Americans are seeing more money in their paychecks, while at least four million workers are seeing higher salaries or bonuses.

Given the potential economic damage that tariffs can cause to the U.S. economy, it is crucial that Congress reasserts its authority over trade policy. As such, all members of Congress should support the Global Trade Accountability Act.

Onward, 

Grover G. Norquist
​President, Americans for Tax Reform

Photo Credit: Gage Skidmore


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