Alexander Hendrie

Flashback: IRS Agents Accused of “Military Style Raids,” Harassed Children & Small Business Owners

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Posted by Alexander Hendrie on Tuesday, July 6th, 2021, 2:05 PM PERMALINK

President Biden wants to drastically increase the size and scope of the IRS. He has proposed $80 billion in new funding over the next decade and wants to hire almost 87,000 new agents, which would more than double the IRS workforce. He has also endorsed a bipartisan spending plan that would give the IRS $40 billion. 

Both proposals are designed to squeeze more money out of American taxpayers. This will not fall on large corporations and the wealthy as they have armies of accountants and lawyers that already help them navigate the tax code. Instead, it will fall on middle income Americans and small businesses. Biden’s proposal calls for “new specialized enforcement staff,” would require financial institutions to report inflows and outflows of businesses and individuals and would provide additional resources for the IRS to track cash and cryptocurrency transactions.

This should be concerning to taxpayers given the IRS has a history of targeting taxpayers with heavy handed tactics including intimidation and harassment. In the late 1990s, the IRS came under scrutiny for the harsh tactics it used to enforce the tax code. With tens of billion in new funding, it is not hard to see how these abuses could return. 

A 1998 article by Washington Post noted many small business owners were harassed by the IRS, only for the agency to find no evidence of wrongdoing:

“An Oklahoma tax-return preparer, a Texas oilman and a Virginia restaurateur told lawmakers how raiding parties of armed agents from the IRS Criminal Investigation Division barged into their homes or offices, frightened their employees and families -- and ultimately came up empty-handed."

“Two of the men said they later found that former employees had precipitated the raids, and that the IRS had done little or no checking on their informants' credibility. The third witness said he never could determine why he was targeted.”

One man described over a dozen armed IRS officials raiding his offices, seizing business documents, and harassing clients and employees: 

“Richard Gardner, whose company prepares 4,500 to 6,000 tax returns each year, said that one morning in 1995, he was called out of a meeting. He found 15 IRS agents and a half-dozen U.S. marshals in his lobby, "all armed and wearing those jackets that say in bright letters IRS' or U.S. Marshal' on the back."

“They seized his client records, computers, personal papers and other files, he said, and held them for two years while the IRS investigation continued. Gardner was able to buy new computers and continue in business, but the damage to his business was extensive. He said IRS agents went to clients and demanded they wear hidden microphones when meeting with Gardner; they hauled his wife before a grand jury; and his employees were told they would be able to buy his business cheaply because he would be out of business soon.”

These were not isolated cases. A 1998 article by the New York Times described “military style raids” by IRS agents against taxpayers who were accused of nonviolent behavior.  

A 1997 article by CNN summarized the findings of one Senate Finance Committee Hearing examining the IRS abuses. The article included the testimony of one witness IRS historian Shelley Davis, who noted that the IRS kept vast amounts of data on the American people. As the article stated:

Davis described the IRS as "the best secret-keeping agency in our government today. They are better than the CIA, better than the FBI."

She elaborated on the reasons she grew disillusioned with the way the IRS goes about its business. "I discovered that the IRS does keep lists of American citizens for no reason other than that their political activities might have offended someone at the IRS; about how the IRS believes that anyone who offers even legitimate criticism of the tax collector is a tax protester; about how the IRS shreds its paper trail, which means that there is no history, no evidence and, ultimately, no accountability.’

Another witness, Robert Schriebman, a tax professor at the University of Southern California noted that the IRS had broad authority to target taxpayers. As the article states:

“The IRS can take a taxpayer's home by just the signature of the district director alone," he said.

"There's no court hearing, there is no notice, there is no opportunity to litigate the merits of the IRS' claim," Schriebman said. "The IRS can close down a business ... and take away a taxpayer's livelihood by merely filing a few papers in federal court. The judge simply signs the seizure order and that's all there is to it. The taxpayer gets absolutely no notice, absolutely no opportunity to contest the legality of the assessment that the IRS claims is owed."

An article from ProPublica noted stories where young children were intimidated by IRS agents raiding the homes of taxpayers: 

“In 1997 and 1998, the Republican-controlled Senate held a series of dramatic hearings on alleged abuses by the IRS. Agency employees testified behind black curtains with their voices disguised, like Mafia snitches, to protect their identity. The testimony depicted an organization run amok, with claims of biased examiners and lurid tales of agents in flak jackets storming establishments. One restaurant owner told of a raid to seize business records at the home of an employee, during which agents forced a teenage boy to the floor at gunpoint and made a group of teenage girls at a slumber party get dressed “under the watchful eyes of male agents.” A USA Today headline read: “Witnesses Accuse IRS Investigators of ‘Gestapo-like’ Raids.”

Given the history the IRS has in harassing small businesses and workers, proposals to give billions more in taxpayers funds to the agency should be alarming to taxpayers.

 

Photo Credit: Cliff


Biden Plan to Repeal IDCs Threatens Manufacturing Jobs, Raises Energy Costs

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Posted by Alexander Hendrie on Thursday, June 3rd, 2021, 12:59 PM PERMALINK

President Joe Biden and Congressional Democrats have proposed repealing various tax provisions they describe as “oil and gas subsidies.” Many of these provisions, such as the deduction of intangible drilling costs (IDCs), are not subsidies but are important tax provisions that promote investment, job creation, and growth. Repealing this provision and raising taxes on oil and gas taxpayers is a reckless policy proposal that will threaten manufacturing jobs across the country and raise the cost of energy for American families.

What are IDCs?

IDCs allows independent producers to immediately deduct business expenses related to drilling such as labor, site preparation, repairs, and survey work. As a recent letter led by Rep. Jodey Arrington (R-Texas) and signed by 55 members of Congress explained, IDCs are neither unique nor lavish tax breaks for the oil and gas industry:

“IDCs are not credits, loopholes, or subsidies. They are ordinary and necessary deductions, and a far cry from the lavish tax credits flowing to wealthy green energy investors and electric vehicle owners. Our tax code is designed to levy taxes on net profits, not on dollars used for operational costs or capital expenditures. Every business since the inception of the tax code, has used cost recovery provisions.”

There are several recent proposals that would repeal IDCs along with a host of other tax provisions for oil and gas. For instance, Senate Finance Committee Chairman Ron Wyden (D-Ore.) recently proposed several tax increases on oil and gas in his “Clean Energy for America Act.” President Joe Biden’s recently released Fiscal Year 2022 budget also calls for repealing these tax provisions as part of his plan to raise taxes on the industry by over $100 billion. Finally, pro-socialist politicians Senator Bernie Sanders (I-Vt.) and Rep. Ilhan Omar (D-Minn.) have introduced legislation with these tax increases.

Repealing IDCs is bad tax policy.

The deduction for IDCs is consistent with immediate expensing offered to all business investments, a policy change instituted in the Tax Cuts and Jobs Act of 2017. Currently, taxpayers can immediately deduct the cost of most assets (those with 20 years or less of depreciable life) in the year they are purchased. This policy incentivizes new investment, leading to greater economic productivity, job growth and higher wages. It also simplifies the tax code by equalizing the tax treatment of new investments with other business expenses such as wages, rent, and healthcare costs. 

In the past, many Democrats have recognized that full business expensing is not a loophole, but an important way to promote investment. For instance, former Obama Economic Adviser Jason Furman has long supported full business expensing, and the policy was included in several Obama budgets (albeit as part of a net tax increase). 

The Obama White House correctly noted that the provision would help businesses and workers in press releases and fact sheets: 

“If a business bought an additional $1 million worth of equipment next year, they would be able to deduct the full $1 million up front, potentially accelerating hundreds of thousands of dollars in tax cuts. That’s real money that businesses… could use to expand or hire new workers right now, and provides a strong incentive to increase investment now, creating even more jobs.” 

Repealing IDCs will cost jobs and investment.

IDCs support high-paying American jobs across the country. As noted in a 2014 study by Wood Mackenzie consulting, repealing the immediate deduction for IDCs would cost 265,000 jobs in the long-term. Given that this study was conducted almost a decade ago, it is entirely possible that job losses would be greater if the provision was repealed today.

Repealing IDCs will also reduce investment in the economy by $407 billion in the long-term because businesses will have less cash to invest in new projects. While it would have a significant economic impact, repealing IDCs would raise very little revenue. According to the Joint Committee on Taxation, repeal of IDCs raises $3.5 billion over the next decade. President Biden’s FY 2022 budget assumes repealing IDCs would raise $10.5 billion, which if true, would make it a greater, but still relatively insignificant revenue raiser.

Oil and gas businesses collectively support 11 million high-paying manufacturing jobs. In 2017, these jobs paid an average salary of $102,000, 85 percent higher than the average private sector salary.  Given President Biden routinely talks about the need to create millions of new high-paying manufacturing jobs, one would think he would support retaining provisions like the deduction for IDCs. Instead, he wants to repeal these provisions and raise taxes on existing manufacturing jobs.

Repealing IDCs will raise costs and threaten American energy independence.

Biden and Congressional Democrats are proposing this tax increase at a time that energy prices have increased significantly. The cost of gasoline is at a seven-year high and in some parts of the country costs over $4 per gallon. According to the Bureau of Labor Statistics, Gasoline prices have increased by 49.6 percent between April 2020 and April 2021 while oil has increased 37.3 percent.

After being reliant on foreign energy in past decades, the U.S. became a net energy exporter in 2019 and 2020. This achievement helps America’s economy and strengthens national security as we are less reliant on foreign powers for our energy needs. Instead of building on this strengthen, Biden would diminish it, a move that would increase global reliance on hostile nations like Iran and Russia for energy.

Photo Credit: Gino Pezzani


Democrats' $30 Billion Small Business Tax Hike Violates Biden Tax Pledge

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Posted by Alexander Hendrie on Wednesday, March 10th, 2021, 12:54 PM PERMALINK

Democrats have snuck in a $31 billion tax increase on small businesses in President Joe Biden’s $1.9 trillion spending plan. This tax hike violates President Biden’s pledge not to raise one penny of taxes on any American earning less than $400,000 per year.

If Biden and Harris want to keep their pledge, they must veto the bill or instruct congressional Democrats to insert bill language exempting households making less than $400,000 in a given year.

The provision extends the $500,000 cap on passthrough businesses deducting excess business losses for one year – from 2025 to 2026. This could impact a restaurant, retailer, or other capital-intensive business that sees significant business losses in any year due to the cost of wages, rent, new equipment, inventory, and interest payments.

The cap was originally created by the Tax Cuts and Jobs Act passed by Congressional Republicans. It was used to offset the creation of the 20 percent deduction for passthrough businesses, which resulted in a net tax cut for taxpayers. Democrats are proposing to extend the cap, but not the 20 percent deduction.

A previous analysis of the provision by the Joint Committee on Taxation found that the cap could raise taxes on 45,000 filers making below $200,000 in Calendar Year 2020. While the analysis notes that business losses in 2020 were much higher because of the COVID-19 pandemic, it nevertheless shows that small businesses would be hit by extending the cap.

On over 50 occasions, President Biden and Vice President Kamala Harris made a pledge to each and every household making less than $400,000 that they would not raise any of their taxes a single penny.

Americans for Tax Reform has compiled the written and video documentation of the Biden-Harris pledge. “I give you my word as a Biden,” Biden said repeatedly.

This is not the first time that Democrats have proposed raising taxes on struggling businesses. Last month, Congressional Democrats called for a retroactive repeal of provisions allowing businesses to deduct net operating losses. This would be a $250 billion tax hike and would hit small and medium sized companies that have seen unprecedented challenges due to the Coronavirus pandemic.

While small businesses have been hit particularly hard with forced shutdowns and new government mandates, businesses of all size have struggled with a decline in revenues and additional expenses from implementing new technologies for remote work and retrofitting existing workspaces.

Democrats used to support expanding the ability of businesses to claim losses during an economic downturn. For instance, President Obama highlighted this tax relief as a “fiscally responsible economic kick-start,” in a 2009 press release:

“The Economic Recovery Act included a provision that allowed small businesses to count their losses this year against the taxes they paid in previous years. "Today, the President extended that benefit for an additional year and expanded it to medium and large businesses as well. Business losses incurred in 2008 or 2009 can now be used to recoup taxes paid in the prior five years. This provision is a fiscally responsible economic kick-start, putting $33 billion of tax cuts in the hands of businesses this year when they need it most, while enabling Treasury to recoup the majority of that funding in the coming years as these businesses regain their strength and resume paying taxes.”

Key Congressional Democrats including House Speaker Nancy Pelosi (D-Calif.) and Ways and Means Chairman Richie Neal (D-Mass.) also praised this tax relief when it was passed in 2009:

Speaker Pelosi: “The bill also has the net operating loss carryback, which businesses tell us is necessary for them to succeed and to hire new people, and also to mitigate some of the damage that has been done to the economy from past policies.”

Chairman Neal: “Finally, the bill provides net operating loss relief for many businesses that have been simply hanging on in this country over the last year. It is particularly important to retailers. Based on a bill that I filed with Representative Tiberi which became the basis for this provision, this relief for businesses, big and small, will provide quick capital at a time when it is currently impossible to find.”

If Biden and Harris want to keep their pledge, they must veto the bill or instruct congressional Democrats to insert bill language exempting households making less than $400,000 in a given year.

The Biden and Harris tax pledge documentation can be found below. They made the tax pledge on at least 56 occasions:

Click here for the short version of the video with 13 examples of the pledge.

Click here for the full version of the video with every instance of the pledge.

Joe Biden on CNBC, May 22, 2020: "Nobody making under 400,000 bucks would have their taxes raised. Period. Bingo."

Joe Biden on ABC News, August 23, 2020:

Joe Biden in Kenosha, Wisconsin on September 3, 2020: "But here’s the deal. I pay for every single thing I’m proposing without raising your taxes one penny. If you make less than 400 grand, you’re not going to get a penny taxed."

Joe Biden during a WFLA Interview on September 15, 2020: “Nobody making less than $400,000 have to pay a penny more in tax under my proposals.”

Joe Biden during a Telemundo Interview on September 15, 2020: "I'm not going to raise taxes on anybody making less than 400,000.”

Joe Biden on Twitter, September 17, 2020: “If you make under $400,000, you will not pay a penny more in taxes when I'm president.The super-wealthy and big corporations will finally pay their fair share — and we'll invest that money in working families. We're going to reward work — not wealth.”

Joe Biden on Twitter, September 17, 2020: "No surprise, Donald Trump is lying about my tax plan. Here’s the truth about how I’ll make corporations pay their fair share while ensuring Americans making under $400,000 don’t pay a penny more."

Joe Biden in Hermantown, Minnesota on September 18, 2020 "And I’ll do it without raising anyone’s taxes if you make less than $400,000 a year."

Joe Biden in Manitowoc, Wisconsin on September 21, 2020: “Under my plan nobody making less than 400,000 bucks -- and I don’t make it and you don’t make it, I don’t think -- in this country will see their taxes go up.”

Joe Biden in Greensburg, Pennsylvania on September 30, 2020: “And we’re going to do it without asking anyone who makes under $400,000 a year to pay one more penny in taxes. Guaranteed. My word on it.”

Joe Biden in Jonestown, Pennsylvania on September 30, 2020: “We’re going to do it all without raising a penny in taxes for anybody who makes less than $400,000 a year.”

Joe Biden in Grand Rapids, Michigan on October 2, 2020: “Anyone making less than $400,000 a year won’t pay a penny more."

Joe Biden in Miami, Florida on October 5, 2020: “I’m not going to raise taxes on anyone who makes less than $400,000 a year. You won’t pay a penny more. I guarantee you.”

Kamala Harris during Vice Presidential Debate on October 7, 2020: “Joe Biden has been very clear. He will not raise taxes on anybody who makes less than $400,000 a year.”

Joe Biden on Twitter, October 7, 2020: “Let me be clear: A Biden-Harris Administration won't increase taxes by a dime on anyone making less than $400,000 a year.”

Joe Biden in Las Vegas, Nevada on October 9, 2020: “It’s not going to raise a penny in tax for anyone making less than $400,000 a year. Not a penny.”

Kamala Harris on Twitter, October 9, 2020: “Joe Biden has been very clear: he will not raise taxes on anybody who makes less than $400,000 a year.”

Joe Biden in Erie, Pennsylvania on October 10, 2020: “I’m not going to raise taxes on anybody making less than 400 grand.”

Joe Biden in Toledo, Ohio on October 12, 2020: “I’m not going to raise taxes on anyone who makes less than $400,000 a year."

Joe Biden in Pembroke Pines, Florida on October 13, 2020: “I’m not going to raise taxes on a single solitary American making less than $400,000 a year. You won’t pay a penny more. It’s a guarantee.”

Joe Biden on Twitter, October 15, 2020: “Let me be very clear: If you make under $400,000 you won’t pay a penny more in taxes under my administration.”

Joe Biden ABC Town Hall on October 15, 2020: 

Joe Biden in Michigan on October 16, 2020: “No one who makes less than $400,000 a year will pay a penny more.”

Kamala Harris in Orlando, Florida on October 19, 2020: “Joe Biden will not increase taxes on anyone who makes less than $400,000 a year, period.”

Kamala Harris in Jacksonville, Florida on October 19, 2020: “Taxes will not be raised on anyone making less than $400,000 a year.”

Kamala Harris in Milwaukee, Wisconsin on October 20, 2020: “We will not increase taxes for anybody making under $400,000 a year.”

Kamala Harris in Asheville, North Carolina on October 21, 2020: “Joe Biden is saying, I’m not going to raise taxes on anybody who makes less than $400,000 a year.”

Kamala Harris in Atlanta, Georgia on October 23, 2020: “Which is why Joe Biden and I are saying, “One, taxes will not be raised on anyone making less than $400,000 a year.”

Joe Biden in Bucks County, Pennsylvania on October 24, 2020: “None of you will have your taxes raised. Anyone making less than $400,000 will not see a penny in taxes raised."

Joe Biden on CBS 60 Minutes, October 25, 2020:

Biden: “Nobody making less than $400,000 will pay a penny more in tax under my proposal.”

Norah O'Donnell, CBS: "That's a promise?"

Biden: "That's a guarantee. A promise. I give you my word as a Biden. That's an absolute guarantee."

Joe Biden in Atlanta, Georgia on October 27, 2020: “I guarantee you -- no matter what you hear this president lying about -- no one making less than $400,000 a year will have one penny in taxes raised. Not one penny. It’s a guarantee.”

Kamala Harris in Reno, Nevada on October 27, 2020: "Joe Biden says we’re not going to increase taxes on anyone making less than $400,000 a year."

Kamala Harris in Las Vegas, Nevada on October 27, 2020: “Joe Biden says, that we’re not going to raise taxes on anyone making less than $400,000 a year."

Joe Biden in Atlanta, Georgia on October 27, 2020: “No one making less than $400,000 a year will have one penny in taxes raised. Not one penny. It's a guarantee.”

Kamala Harris in Phoenix, Arizona on October 28, 2020: “We are not going to raise taxes on anyone making under $400,000 a year."

Kamala Harris in Tucson, Arizona on October 28, 2020: “Joe Biden who says, 'You want to deal with the economy, then one, we will not raise taxes on anyone making less than $400,000 a year.'"

Joe Biden in Broward County, Florida on October 29, 2020: “We can do it without raising taxes on a single person making less than 400,000 bucks a year.”

Joe Biden in Tampa Bay, Florida on October 29, 2020: “And we can do it without raising taxes a single solitary penny on working class or middle class families. I guarantee you, my word as a Biden, no one making less than $400,000 will pay a single penny more in taxes. Not a penny.”

Kamala Harris in Fort Worth, Texas on October 30, 2020: “Joe Biden is committed to not raising taxes ever on anyone making less than $400,000 a year.”

Joe Biden in Des Moines, Iowa on October 30, 2020: “We can do it without raising a penny tax on the middle class. I guarantee you -- give you my word as a Biden -- no one making less than $400,000 a year will see a penny in their taxes raised, no one.”

Kamala Harris: in McAllen, Texas on October 30, 2020: “Let’s deal with the economy and not raise taxes for anyone who makes less than $400,000.”

Joe Biden in St. Paul, Minnesota on October 30, 2020:  “I promise you, you have my word, if you make less than $400,000 a year, you won’t pay a penny more in taxes.”

Joe Biden in Milwaukee, Wisconsin on October 30, 2020: “I give you my word as a Biden, if you make less than $400,000 -- if I’m elected president -- you’re not going to see a penny of your taxes go up, not a penny.”

Kamala Harris in Houston, Texas on October 30, 2020: “Joe Biden says we will not raise taxes on anyone that makes less than $400,000 a year.”

Kamala Harris in Fort Worth, Texas on October 30, 2020: “Which is why Joe Biden is committed to not raising taxes ever on anyone making less than $400,000 a year.”

Joe Biden in Detroit, Michigan on October 31, 2020: “Under my plan if you make less than $400,000 I guarantee you're not going to pay a penny more in taxes.”

Joe Biden in Flint, Michigan on October 31, 2020: “Under my plan, if you make less than $400,000 a year, you’re not going to pay a penny in additional taxes.”

Joe Biden on Twitter, November 1, 2020: "Under my tax plan, no one making under $400,000 will see their taxes go up. But it’s time large corporations and the wealthiest Americans pay their fair share."

Joe Biden in Cleveland, Ohio on November 2, 2020: “Under my plan, if you make less than $400,000, you won’t pay a single penny, more in taxes. You have my word on it.”

Joe Biden in Beaver County, Pennsylvania on November 2, 2020: “We’re not going to raise taxes on anybody making less than 400,000 bucks a year.”

Joe Biden in Pittsburgh, Pennsylvania on November 2, 2020: "Under my plan I commit to you no one making less than 400 grand is going to see a penny in taxes raised."

Kamala Harris in Pittsburgh, Pennsylvania on November 2, 2020: “Let me be clear, Joe and I will not increase taxes on anyone making under $400,000 a year, period.”

Joe Biden in Pittsburgh, Pennsylvania on November 2, 2020: “Under my plan, as Kamala said, if you make less than 400,000 bucks, you’re not going to pay a penny more in taxes.”

Kamala Harris in Detroit, Michigan on November 3, 2020: “That’s why Joe says we’re not passing any taxes on anybody making less than $400,000 a year."

Kamala Harris on Twitter,  November 11, 2020: “As president, @JoeBiden will make corporations and the wealthiest finally pay their fair share—and he won’t ask a single person making under $400,000 per year to pay a penny more in taxes."

Kamala Harris on Twitter, November 21, 2020: “Let’s be clear: if you make under $400,000 a year, you won’t pay a penny more in taxes under a Biden-Harris administration.”

Photo Credit: Gage Skidmore


Senator Rob Portman Unveils Bipartisan Retirement Reform Bill

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Posted by Spencer Peck, Alexander Hendrie on Tuesday, June 18th, 2019, 11:45 AM PERMALINK

Senator Rob Portman (R-Ohio) has released a bipartisan retirement reform bill alongside Senator Ben Cardin (D-Md). The ‘Retirement Security and Savings Act of 2019’ enacts sweeping, common sense reforms in order to advance the American retirement system into the 21st century.

The legislation includes numerous reforms that strengthen 401(k) plans. These popular and important to American families because they allow individuals control over their own retirement savings. Contributions to 401(k)s are tax free and any gains accrued are also tax free. Additionally, most employers offer some sort of ‘matching contribution’ plan wherein the company will match, up to a point, whatever contributions a worker makes to their own 401 (k) account. This not only boosts savings, it also allows workers to more directly manage their own retirement plans.

Portman’s bill contains provisions dedicated to solving one of four goals -- offering relief to Americans who have saved too little for retirement, incentivizing and supporting small business retirement plans, promoting accessibility to retirement savings for low-income workers, and offering flexibility for current or near retirees.

 

Help for Workers who have Saved too Little:

Unfortunately, many Americans approach retirement age with insufficient savings. This bill contains a number of provisions that remove regulations that hamper late-term saving and make it easier for workers to contribute to retirement accounts later on in their careers.

The first of these provisions is an employer tax credit which is made available by automatically enrolling workers in ‘safe harbor’ plans at a rate of 6% of pay (on top of the current 3% of pay safe harbor). The bill also increases the ‘catch up’ contribution cap from $6,000 to $10,000 for people 60 years or older. Additionally, the plan allows employers to make matching contributions to retirement plans equal to the amount workers are paying towards their student loan debt.

Small Business Retirement Plan Incentives:

Small businesses are burdened by complex and overbearing IRS regulations which impact retirement plans for their workers. Portman’s bill simplifies these rules and makes it easier for small business employees to save for retirement.

The proposal increases the tax credit for new small business retirement plans form $500 to as much as $5,000. It also provides a tax credit for small businesses which offer more generous ‘safe harbor’ plans to their workers. On top of this, the bill also eliminates penalties for unintentionally violating complex IRS retirement plan rules as long as the company self corrects its mistakes.

Retirement Access for Low-Income Workers:

Low-income Americans often live paycheck to paycheck, making it difficult to save for retirement. This bill expands access to retirement for these workers by cutting taxes and simplifying retirement plans.

The plan lowers the income threshold for ‘Saver’s Credit’, expanding access to those who need it most. Additionally, Portman makes ‘Saver’s Credit’ directly refundable into retirement accounts with a new ‘government match’. The bill also expands 401 (k) eligibility to part-time workers who put in 500 - 1,000 hours for two years in a row.

Flexibility for Current Retirees:

Increased life expectancy along with the changing nature of work make it more desirable for many Americans to continue working later and contributing to their retirement accounts. Current regulations punish them for doing this. Portman’s bill allows workers to more fully control their own retirement.

It does this by first, gradually increasing the age for required minimum distributions to 72 by 2023 and 75 by 2030. It also exempts people with $100k or less in retirement savings from the required minimum distributions, allowing them to continue contributing to their retirement savings. Finally, the bill encourages the expansion of ‘QLAC’s’ - retirement plans which pay out annually to retirees who live past their life expectancy.

 

The Retirement Security and Savings Act of 2019 makes great, long-needed reforms to the American retirement system. It makes saving much easier for low-income workers, and it incentivizes the creation of new retirement plans for small businesses. Ultimately, this is a bipartisan, common sense bill which provides more financial control to workers and small businesses. Several members of the Senate Finance Committee have expressed support for the bill, but the rest of Congress needs to come around and support these reforms to serve the American people.

Photo Credit: Gage Skidmore


The Save American Workers Act Protects Small Businesses From Obamacare Taxes


Posted by Alexander Hendrie on Tuesday, September 11th, 2018, 3:31 PM PERMALINK

Later this week, the House of Representatives is set to take up H.R. 3798, the “Save American Workers Act,” sponsored by Congresswoman Jackie Walorski (R-IN).

All members of Congress should support the Save American Workers Act. This legislation, which reduces taxes by $58.5 billion in the next decade, offers important relief from Obamacare taxes by freeing small businesses from unnecessary, job killing taxes and mandates.

The legislation provides retroactive relief from Obamacare’s employer mandate between December 31, 2014 and January 1, 2019 and also redefines an employee as an individual working 40 hours per week.

Under current law, the employer mandate tax penalty forces employers to pay a $2,000 tax per full time employee (defined as 30 hours per week) if they do not offer “qualifying” health coverage as defined by the federal government. This mandate imposes extensive costs on businesses, resulting in part-time workers being given less work. A study by the National Bureau of Economic Research estimates that as many as 250,000 small business jobs may have been eliminated by the mandate.

H.R. 3798 also pauses the Cadillac tax on employer provided health insurance for an additional year, so that the tax will not hit until December 31, 2022.

Like the employer mandate, the Cadillac Tax is devastating to employers. Under current law, the Cadillac Tax is a 40 percent excise tax on employer provided health insurance plans exceeding a value of $10,200 for individuals and $27,500 for families. This threshold includes the value of a healthcare plan, but also includes payments to Health Savings Accounts and Flexible Spending Accounts.

When the Cadillac tax was scheduled to go into effect in 2018, the Kaiser Family Foundation estimated it would hit 26 percent of employer provided plans in two years and 42 percent of employer provided plans in ten years.

Finally, the Save American Workers Act repeals the Obamacare tanning tax. This discriminatory tax is imposed directly on tanning businesses in the form of a 10 percent excise tax and has wiped out an estimated 10,000 tanning salons, many owned by women.

This legislation represents another important step toward full repeal of all one trillion dollars in Obamacare taxes. The Republican controlled Congress has already made impressive progress toward this goal:

  • Late last year, lawmakers repealed the Obamacare individual mandate tax penalty, which was one of the most regressive taxes in the code.  This tax hit 6.6 million American families and individuals. 79 percent of those paying the mandate made less than $50,000, and 37 percent of those paying the mandate made less than $25,000.

 

  • Lawmakers have also passed legislation that offered incremental relief from the medical device tax and delay of the health insurance tax. The 2.3 percent medical device tax is imposed on roughly 6,500 medical device manufacturers, the majority of which are small businesses. Half of the tax is paid by those earning less than $50,000 a year and it will increase premiums by $5,000 per family over the next decade according to research by the American Action Forum. As many as 1.7 million small businesses and 23 million families that receive coverage through their employer are impacted by this tax.  
     
  • The House has passed legislation to dramatically expand HSAs. HSAs are by 25 million American families and individuals in combination with a high deductible health plan. This package of legislation doubled the contribution limit for an HSA from $3,450 to $6,650 for an individual and $6,900 to $13,300 for a family, expanded access to HSAs by allowing working seniors enrolled in Medicare Part A to contribute to an HSA, allowed individuals with a bronze or catastrophic health plan to be eligible for an HSA, and repealed the ObamaCare restriction on using an HSA to purchase over-the-counter medications.
     

The Save American Workers Act represents another step toward achieving free market healthcare reform. Members of Congress should vote yes on this important legislation.


Norquist Praises Release of Tax Reform 2.0

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Posted by Alexander Hendrie on Monday, September 10th, 2018, 5:18 PM PERMALINK

ATR President Grover Norquist released the following statement in response to the release of Tax Reform 2.0 legislation:

“Tax Cut 2.0 makes job creating tax reduction permanent, allows Americans to save for retirement tax free and will spur investment in new business.

“Most importantly, it reminds the world that as long as there is a Republican congress and President there will be tax reform and tax reduction –every single year

“Every year another tax cut. Every year a pay increase as tax cuts are pay increases that increase your take home pay.”

Photo Credit: Gage Skidmore

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Trump Should Appoint an Ambassador to the OECD to Defend Pro-Growth Tax Reform

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Posted by Alexander Hendrie on Friday, August 3rd, 2018, 8:00 AM PERMALINK

Since passage of the Tax Cuts and Jobs Act, European bureaucrats have taken aim at the success of the law, threatened to designate the U.S. a tax haven, and have even proposed a global minimum tax on digital innovation aimed at iconic American businesses.

Based on these acts, it has become clear that the U.S. needs an Ambassador to the Organisation for Economic Co-Operation and Development (OECD) who is well versed in the TCJA – specifically the international provisions of the law – and can clearly and credibly advocated for and defend the pro-growth policies that your administration has enacted.

In a letter to President Donald Trump, ATR urged the nomination of an ambassador to the OECD that will defend American competitiveness and advocate for pro-growth policies.

Similar letters have also been released by Senator Tim Scott (R-SC) and Congressman Jim Renacci (R-Ohio).

The full ATR letter can be found here and is below in full.

Dear President Trump:

I urge you to nominate an ambassador to the Organisation for Economic Co-operation and Development (OECD). It is crucial that your administration has a representative at the OECD that can defend American competitiveness and advocate for pro-growth policies.

Under your administration, the economy is surging thanks to deregulation and the passage of tax reform. The economy grew 4 percent in the second quarter of 2018 and has averaged over 3 percent since the start of your presidency. Job openings are at a record high, unemployment is at a 17 year low, and American families are seeing increased take-home pay.

Since passage of tax reform, the U.S. has even been named the most competitive economy in the world, according to the IMD World Competitiveness Center.

Unfortunately, this economic resurgence is being threatened by European bureaucrats that are taking aim at the success of tax reform.  

High-tax, big government European nations have taken aim at the tax reform law and have demanded the OECD review key international provisions as Harmful Tax Practices. 

Some countries have even gone as far as to suggest that the OECD designate the U.S. a tax haven, and it is expected that the EU will launch a legal challenge to the tax law in the World Trade Organization.

EU leaders have also called for a discriminatory, global minimum tax on digital innovation, which would be imposed on the digital revenue of tech companies, based on the concern from Europe that companies are paying too little.

This tax is a thinly veiled attempt to target US businesses, as it is predominately aimed at iconic American companies out of Silicon Valley.

Ironically, European nations are trying to undermine US tax law that seeks to clarify the tax base and the very problems that the EU digital tax purportedly seeks to address.

The U.S. needs an Ambassador to the OECD who is well versed in the TCJA – specifically the international provisions of the law – and can clearly and credibly advocated for and defend the pro-growth policies that your administration has enacted.

Onward,

Grover G. Norquist
President, Americans for Tax Reform

 

Photo Credit: OECD


In Victory for Free Speech, Trump Admin Rolls Back Schedule B Disclosure Requirements


Posted by Alexander Hendrie on Wednesday, July 18th, 2018, 1:00 PM PERMALINK

The IRS will no longer require that certain non-profits submit Schedule B forms containing the personal taxpayer data of their donors, according to a release by the Treasury Department.

By ending this requirement, the Trump administration has delivered a major victory to advocates of free speech and for efforts to hold the IRS accountable to taxpayers.

As noted by Treasury Secretary Steven Mnuchin, the decision in no way limits transparency in the political process:

“…It is important to emphasize that this change will in no way limit transparency. The same information about tax-exempt organizations that was previously available to the public will continue to be available, while private taxpayer information will be better protected.  The IRS’s new policy for certain tax-exempt organizations will make our tax system simpler and less susceptible to abuse.”

Fifty years ago, Congress required the IRS to collect personal information from donors that give to non-profits such as section 501(c)(3) organizations. This information, which includes the names and addresses of donors, is submitted to the IRS on the Schedule B form. The agency later extended this requirement to all other tax-exempt organizations including 501(c)(4)s and 501(c)(6)s.

Bizarrely, schedule B forms are not used for any official purpose – the IRS is actually prohibited from sharing this sensitive information. Instead of serving a legitimate purpose, the disclosure requirement creates needlessly compliance costs on both non-profits and the IRS.

More alarmingly, the form has given unelected bureaucrats a tool to chill political speech in recent years.

For instance, under the Obama administration there were several cases where agency officials leaked the sensitive information contained on Schedule B forms for political purposes, like when the schedule B of the National Organization for Marriage was leaked.

In fact, 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.”

While ending the collection of Schedule B forms for some non-profits is a strong step in the right direction, Congress should follow the lead of the Trump administration by removing this disclosure requirement for ALL non-profits.

They can accomplish this goal immediately by passing H.R. 4916, the Preventing IRS Abuse and Protecting Free Speech Act, introduced by Congressman Peter Roskam (R-Ill.), which would ensure that government bureaucrats could no longer use the Schedule B disclosure requirements to target political free speech ever again.

To be sure, the IRS decision to end the collection of sensitive taxpayer data for some non-profits is a huge victory for free speech and will stop future administrations from targeting these organizations.

Now, it is now incumbent on Congress to follow the lead of the administration and ensure that the prohibition on collecting Schedule B forms is expanded to all non-profits and codified in law.

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The 340B Safety Net Drug Program is in Dire Need of Reform

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Posted by Alexander Hendrie on Monday, July 9th, 2018, 10:00 AM PERMALINK

Created in 1992, the 340B safety net drug program was originally designed to provide uninsured and low-income Americans with access to life-saving and life improving prescription medicines. Unfortunately, the program is no longer working as intended and is in dire need of reform and oversight.

340B requires manufacturers to provide outpatient prescription drugs to healthcare organizations (typically hospitals, clinics, and other healthcare centers) at a significant discount. This discount can be as high as 50 percent of the average wholesale price and manufacturers are required to provide this discount as a condition of remaining eligible for federal funds from other entitlement programs, such as Medicare and Medicaid.

Over the last 25 years, the nation’s health care system has changed significantly. Congress has passed or expanded numerous laws designed to provide care to lower income individuals and expand access to prescription medicines.

Despite the changing landscape of healthcare, the safety net drug program remains the same as when it was first passed in 1992. Today, it is clear that the program has been operating without necessary safeguards and even may be creating perverse incentives that drive up costs.

President Trump has wisely called for oversight and reform over the 340B safety net drug. Lawmakers should heed his call and ensure that 340B is operating as intended.

Since its inception, the 340B program has operated with little to no oversight. This has included a complete lack of accountability over how savings are distributed to patients and an absence of any reporting requirements.

At the same time, the program has expanded considerably since it was first created. In 2005, just 583 hospitals participated in the program. Today, 12,000 hospitals and non-hospital clinics participate.

This combination of rapid expansion and no oversight has created structural problems and it remains unclear whether patients are seeing any benefit from the discounts provided by the program.

One of the biggest problems centers around hospitals that qualify for 340B based on the DSH (Disproportionate Share Hospital) program, which is designed to compensate those that serve the truly needy.

Most newly participating hospitals are qualifying for 340B based on DSH and these hospitals appear to be the worst offenders of 340B abuse. In 2012, the government initiated its first audit over 340B. Since then, government data has found that two-thirds of DSH hospitals have violated conditions to be eligible for the program.

Because of the absence of oversight, it is unclear if 340B is working as intended. 340B imposes a price control on prescription medicines in order to provide the truly needy with medicines. This price control comes at a cost – everyone else has to pay more. It is unclear whether the savings are being passed along to patients or being absorbed by middlemen.

In fact, a report by the Government Accountability Office (GAO) found that per beneficiary drug expenditures were higher at 340B hospitals than non-340B hospitals, even after accounting for medical conditions.  

Unfortunately, there is no incentive for hospitals to provide better quality care or to lower costs. Perversely, in many cases, there is actually an incentive to prescribe more expensive medicines.

Clearly, there is a need for Congress to act to ensure the safety net drug program is helping the truly needy. Fortunately, the House Energy and Commerce Committee and the Senate Health, Education, Labor and Pensions Committee have both conducted hearings over the program.

One of the next steps lawmakers can take is passing H.R. 4710, the 340B PAUSE (Protecting Access for the Underserved and Safety-net Entities) Act, which would implement reporting and regulation requirements in order to ensure that program is working for the truly needy. 

The legislation imposes a temporary moratorium on new DSH hospitals and requires commonsense data collection including a breakdown of patient mix, charitable care, 340B revenue and contracts with state or local governments that qualify hospitals for 340B.

Lawmakers should also oppose proposals that will perpetuate the abuse and unchecked growth of the 340B program. For instance, H.R. 6071, the “Stretching Entity Resources for Vulnerable (SERV) Communities Act” should be rejected, as it would allow even more hospitals to benefit from out-of-control government mandated price controls and subsidies.

This proposal would allow hospitals to more easily be able to take advantage of funding, due to the lack of requirements for individual patients to receive the discounts and the restrictions on patient definition. This proposal would only make the safety net drug program more unaccountable.

Reform to the 340B safety net drug program is clearly needed. Congress should follow President Trump’s call to ensure the program is working as intended and that waste and abuse is curtailed.

 


Conservative Groups Oppose A Carbon Tax


Posted by Alexander Hendrie on Thursday, April 26th, 2018, 9:55 AM PERMALINK

Americans for Tax Reform today led a coalition of 28 groups in support of a House Concurrent Resolution opposing a carbon tax.

The resolution was introduced today by Majority Whip Steve Scalise (R-La.) and Congressman David McKinley (R-W.V.). As the group notes, a carbon tax would lead to lower income and fewer jobs for American families, and would reverse the many successes of tax reform.

The full letter can be found here and is below:

Dear Members of Congress:

The undersigned organizations urge you to support the concurrent resolution, introduced by Majority Whip Steve Scalise (R-La.) and Congressman David McKinley (R-W.V.), which expresses the sense of the Congress that a carbon tax would be detrimental to the U.S. economy. 

We oppose any carbon tax. We oppose a carbon tax because it would lead to less income and fewer jobs for American families.

For example, a 2014 Heritage Foundation report found that a $37 per ton carbon tax would lead to a loss of more than $2.5 trillion in aggregate gross domestic product by 2030. That is more than $21,000 in income loss per family.

In addition, a carbon tax would cost over 500,000 jobs in manufacturing and more than one million jobs by 2030. According to a 2013 CBO report, a carbon tax is highly regressive.

After President Trump signed the Tax Cuts and Jobs Act into law on December 22, 2017, more than 90 percent of wage earners have had higher take-home pay.

At least 500 companies of all sizes have already announced special bonuses, pay raises, 401(k) match increases, tuition assistance, new training programs and other benefits for workers.

Thanks to the GOP tax cuts, utility companies are lowering rates, which means lower bills for consumers.

A carbon tax would reverse many of these successes.

We support the House Concurrent Resolution in opposition to a job-killing carbon tax and urge members to co-sponsor and support this effort.

Sincerely,

Grover Norquist
President, Americans for Tax Reform

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

James L. Martin, Founder/Chairman
Saulius “Saul” Anuzis, President
60 Plus Association

Phil Kerpen
President, American Commitment

Tom Pyle
President, American Energy Alliance

Lisa B. Nelson
CEO, ALEC Action

Norm Singleton
President, Campaign for Liberty

Bob Carlstrom
President, The Carlstrom Group, LLC

Andrew F. Quinlan
President, Center for Freedom and Prosperity

Jeffrey Mazzella
President, Center for Individual Freedom

David McIntosh
President, Club for Growth

Kent Lassman
President, Competitive Enterprise Institute

Matthew Kandrach
President, Consumer Action for a Strong Economy

Thomas Schatz
President, Council for Citizens Against Government Waste

Craig Richardson
President, Energy & Environmental Legal Institute

Alex Ayers
Executive Director, Family Business for Affordable Energy

Jason Pye
Vice President of Legislative Affairs, FreedomWorks

Tim Huelskamp, PhD
President and CEO, The Heartland Institute

Mario H. Lopez
President, Hispanic Leadership Fund

Carrie L. Lukas
President, Independent Women’s Forum

Heather R. Higgins
CEO, Independent Women’s Voice

Seton Motley
President, Less Government

Daniel J. Erspamer
CEO, Pelican Institute for Public Policy

Mike Stenhouse
CEO, Rhode Island Center for Freedom and Prosperity

David Williams
President, Taxpayers Protection Alliance

Judson Phillips
Founder, Tea Party Nation

Amy Kremer
Co-Chair, Women for Trump

Becky Norton Dunlop
Former Secretary of Natural Resources, Commonwealth of Virginia

 

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