Alexander Hendrie

Congress Must End the Export-Import Bank

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Posted by Alexander Hendrie on Wednesday, May 6th, 2015, 9:30 AM PERMALINK

For the last 80 years, the Export-Import Bank has subsidized American business operations overseas by financing international investments for US firms.The bank has earned a reputation as the poster child for crony capitalism and corporate welfare. Fortunately for supporters of free enterprise, there exists a window of opportunity to put an end to the irresponsible subsidies when the bank’s charter expires on June 30.

Congress can do the right thing by simply doing nothing and allowing the bank’s charter to expire. Not only does the bank leave taxpayers on the hook for hundreds of millions of dollars each year, it distributes these funds in an unfair and irresponsible way to big business.

While the bank purportedly exists to help American business compete overseas, in reality the bank assists a tiny fraction of businesses. In fact, the bank overwhelmingly favors large, well-connected, and well-funded corporations that simply do not need this money. Recent data has found that less than 1 percent of 1 percent of small business benefit from subsidies distributed by the bank.

Not only are these subsidies unnecessary, they are also reckless. The Ex-Im bank’s business model is based on irresponsible loans and poor accounting which leave taxpayers on the hook. According to the Congressional Budget Office, reauthorizing the Ex-Im bank will cost taxpayers a $2 billion over the next decade.

In an effort to end the Ex-Im bank once and for all, ATR recently joined with 55 other free-market organizations to urge Congress to put a stop to this irresponsible corporate welfare. As the letter states, taxpayers deserve a system based on free enterprise, not political favoritism:

America deserves an international trade policy that is based on free-market mechanisms, not paying foreign companies to buy exports from large corporations with political connections.

While Financial Services Chairman Jeb Hensarling (R-Texas) has fought hard to end the bank, he faces resistance from members on on both sides of the political spectrum who are eager to preserve the status quo. Speaker John Boehner recently said he will support any plan that Chairman Hensarling has.

If ever there was a time for fiscal discipline, it is in today’s tight climate of federal deficits and tight budgets. Quite simply, taxpayers cannot afford to subsidize this icon of crony capitalism any longer.

Urge your Congressman to oppose reauthorization of the Export-Import Bank by calling 202-224-3121

Photo Credit: Kim Seng

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Senate Finance Committee Set to Approve Legislation to Improve 529 College Savings Plans

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Posted by Alexander Hendrie on Wednesday, April 29th, 2015, 4:04 PM PERMALINK

The Senate Finance Committee today considered legislation to improve 529 college savings plans. ATR applauds the work of Chairman Orrin Hatch (R-Utah) and Senator Chuck Grassley (R-Iowa) to improve this important savings plan and help middle class families invest in their children's college education. Earlier this year, President Obama attempted to hike taxes on this commonly used plan, but was forced to drop the proposal after backlash from middle class families.

529 savings plans help middle class families invest in their children’s futures. These plans allow parents to invest after-tax earnings into a plan that collects interest, and can later be spent tax-free on their children’s college education. As of 2014, an average of $21,000 has been invested in nearly 12 million accounts.

The common-sense legislation approved by the Senate Finance Committee updates 529 plans to include new technology such as computers and reduces the complexity of setting up and using a 529 plan. The House of Representatives already passed similar legislation by a 401-20 margin in February.

However, as ATR has previously reported, President Obama’s 2015 Budget proposed taxing 529 savings plans despite his prior public support for 529 plans. After public backlash from middle class families, the President reluctantly backtracked on this proposal and removed it from his budget proposal.

Below is the timeline of President Obama’s hypocrisy on 529 savings plans.

  • August 3, 2006: As U.S. Senator, votes to make 529s permanent.
  • 2006: Praises 529s in his book, The Audacity of Hope.
  • 2007: Makes a $240,000 contribution to his own 529 accounts.
  • Sept. 9, 2009: White House Task Force on Middle Class Working Families issues a detailed report on 529s. Top conclusion from the report:

"529 plans are an attractive and convenient means of saving for college.”

The report makes several recommendations on how to further promote 529s.

  • Sept. 9, 2009: Vice President Biden, Treasury Secretary Geithner, and Education Secretary Arne Duncan share a stage at a Middle Class Task Force event at Syracuse University. Geithner strongly touts 529 plans:

"As the Vice President has said, we are also working to implement, expand or improve a wide array of other government programs that encourage education savings and increase college enrollment. Today I want to highlight one program in particular, Section 529 savings plans.

These plans can be an immensely effective way for Americans to save for college. They are generally administered by the states, and they allow people to put aside money for college and enjoy investment earnings that are free of federal taxes and, in some cases, receive state tax benefits, as well. When state tax benefits are included, a typical middle class family can accumulate 25 percent more in 529 accounts than they can in a typical taxable savings account."

  • Sept. 9, 2009: Official White House statement praises 529s:

"A 529 plan, offered by states, provides a convenient, tax-preferred way for families to save for college, and works much like ROTH IRAs, wherein contributions are made with after-tax income, returns accumulate tax free and distributions can be for qualified educational expenses without taxes."

  • July 23, 2010: President Obama sits for a lengthy interview on ABC’s Good Morning America. He was asked, “can you feel the pain directly that other Americans are feeling?” Obama answers by citing his 529s as an example of how he can identify with the middle class:

"Well, part of it has, that part that is devoted to Malia and Sasha's college fund was in a 529, you know, that had been set up when I was still a state senator. And, obviously, that goes up and down with the stock market and so it's lost value like everybody else."

  • Jan. 17, 2015: On a Saturday evening, the White House shares with reporters an outline of President Obama’s tax plan. The ten-page, single-spaced document describes 529s as “upside-down.”
  • Jan. 23, 2015: White House Council of Economic Advisers chairman Jason Furman, in an interview with BloombergBusinessweek, deems 529s “ineffective” and “tilted towards the upper end."
  • Jan. 23, 2015: White House spokesman Josh Earnest dismisses a reporter question on 529s:

"My guess is those who are saying that are critics of the president. And that’s fine. The—I think the facts about the president’s proposal speak for themselves."

  • Jan. 27, 2015: Anonymous Obama administration official announces that the White House is abandoning its plans to tax 529s.


Photo Credit: Michael Jolley

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Thank Rand Paul, Ted Cruz, and Marco Rubio for Promising No Tax Hikes as President

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Posted by Alexander Hendrie on Wednesday, April 29th, 2015, 2:30 PM PERMALINK

Senators Rand Paul, Ted Cruz, and Marco Rubio recently became the first Presidential candidates to sign the taxpayer protection pledge to the American people. These candidates have pledged to “oppose and veto any and all tax increase” as President.

Their decision to "oppose and veto ANY and ALL tax increases" puts pressure on all the other candidates that enter into the race to make the same written commitment. Paul, Cruz, and Rubio understand government should be reformed, so it takes and spends less of our hard-earned money.  

Each candidate should be applauded for fighting for taxpayers and against bigger, more intrusive government. Let’s show our appreciation by sending Rand Paul, Ted Cruz, and Marco Rubio individual Thank You Cards for their strong commitment to the American people:


Photo Credit: Gage Skidmore

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Conservative Groups Support Passage of Trade Promotion Authority

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Posted by Alexander Hendrie on Tuesday, April 21st, 2015, 5:11 PM PERMALINK

Americans for Tax Reform today joined with 25 other free market, taxpayer advocacy, and limited government grassroots and public policy organizations to urge Congress to pass Trade Promotion Authority (TPA). As the letter states, TPA is an important step to promoting free trade, a key conservative public policy goal. See the full letter below. For a pdf version of the letter click here.

Dear Speaker Boehner and Leader McConnell:

On behalf of the free market, taxpayer advocacy, and limited government grassroots and public policy organizations listed below, we urge you to pass Trade Promotion Authority (TPA) as soon as possible.

TPA is a necessary step to get Congress moving on a long-stalled trade agenda. Without it, there is little hope that this Congress will make any progress on advancing free trade, a conservative public policy goal which all our organizations support.

TPA gives the executive branch the authority needed to finalize trade agreements, while Congress retains a robust amount of control, oversight, and transparency; ultimately Congress has an up-or-down vote on every specific trade agreement.

By definition, the term of this TPA will extend beyond the current administration and into the next one—the goal here is to advance America’s free trade agenda this century, and not to be mired in the stalled trade failures of the recent past.

We believe that tariffs are taxes on trade, and ultimately would like to see a world free of government interference in international commerce. Passing TPA is a necessary step toward getting the ball rolling on that long term policy goal, and we therefore urge you to pass Trade Promotion Authority.

Amy Noone Frederick - 60 Plus Association
Dick Patten - American Business Defense Council​
Phil Kerpen - American Commitment
Dan Schneider - American Conservative Union
Stephen DeMaura - Americans for Job Security
Grover Norquist - Americans for Tax Reform
Kevin Waterman - Annapolis Center-Right Coalition​
Jeffrey L. Mazzella - Center for Individual Freedom
Chip Faulkner - Citizens for Limited Taxation
Iain Murray - Competitive Enterprise Institute
April Ponnuru - Conservative Reform Network
Thomas A. Schatz - Council for Citizens Against Government Waste
Steven J. Duffield - Crossroads GPS
Katie McAuliffe - Digital Liberty
Brian Baker - Ending Spending
George Landrith - Frontiers of Freedom
Louie Hunter - Georgia Center Right Coalition
Andrew Langer - Institute for Liberty
Tom Giovanetti - Institute for Policy Innovation​
Brian McClung - Minnesota Center-Right Coalition
Brandon Arnold - National Taxpayers Union
Lorenzo Montanari - 
Property Rights Alliance​
Lori Sanders - R Street
Paul Gessing - Rio Grande Foundation
David Williams - Taxpayers Protection Alliance 
Mike Thompson - Thomas Jefferson Institute For Public Policy​

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Portman: Tax Reform Needs to be at the Top of Our Agenda

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Posted by Alexander Hendrie on Thursday, April 16th, 2015, 3:17 PM PERMALINK

Speaking at an Americans for Tax Reform press conference in the U.S. Capitol, Ohio Senator Rob Portman called for tax reform and tax simplification for American families. The full text of Senator Portman’s remarks can be found below:

"This is the day, tax day, when we have a chance to reflect on our tax code. First, how much we should be paying in taxes and, second, how we should be collecting it. And I just want to make it very clear that there are two very different visions here.

President Obama and the Democrats have already raised taxes $1.3 trillion. People forget that. So taxes have gone up in the last six years. When we talk about the fact that pay checks are flat, in fact, we've even seen a decrease of about 8 percent in take-home pay, and people are facing the middle-class squeeze, part of this is because, by raising those taxes, we've hurt the economy and made it harder not just to get jobs, but to get good jobs.

Second, if you look at his budget that he just put out, and we're in the middle, you know, trying to do our own budget right now as Republicans, he raises taxes at least another $1.5 trillion, depending on how you account some of the fees that are in there, it can go up closer to $2 trillion. So you think about this. Over $3 trillion in new taxes is the Democrat's prescription for our economy.

By the way, he also takes taxes on households, taxes on families, individual taxes to the highest level they've ever been in the history of our country. Certainly in nominal terms but also as a percent of our economy.

So there's two very different visions here and, thanks to Americans for Tax Reform, thanks to Kevin Brady and others in the House side and now with the Senate Republican majority, we have a chance to roll back some of these tax increases but also to have a chance to collect our taxes in a different way. So it's not just about the fact that the other side wants to continually add more taxes to an already weak economy and take families' taxes up to historic levels, but we also need to change the way we tax. And tax reform needs to be at the top of our agenda.

IRS reform, as we've talked about, is certainly needed, partly because it's impossible for any agency to administer this tax code it's such a mess. In terms of the business tax code where, as Grover knows I've spent a lot of time, we now have a situation where we have the highest tax rate of all of the developed countries in the world. It's no wonder we're losing jobs, losing investment, losing whole companies overseas.

This is an opportunity during tax day for us to reflect on that, to lower the tax burden, lower the eight-hours on average it takes an American to fill out their taxes, and the billions of dollars that's wasted in that. But also to reform our tax code so it works better for American families, American workers, so America can once again be a place where America's promise is met. Thanks, Grover."

Photo Credit: Anna Sortino

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ATR Applauds Passage of H.R. 1104, the “Fair Treatment for All Gifts Tax Act”

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Posted by Alexander Hendrie on Thursday, April 16th, 2015, 10:40 AM PERMALINK

The US House of Representatives yesterday unanimously passed H.R. 1104, the “Fair Treatment for All Gifts Tax Act." In past years, the IRS has been caught applying improper scrutiny towards conservative organizations. This legislation addresses the agency inappropriately applying federal gift tax rules to contributions given to some non-profits.  

H.R. 1104, introduced by Ways and Means Oversight Subcommittee Chairman Peter Roskam (R-Ill.) was part of a package of legislation passed yesterday that will make the IRS more accountable to the American people and put a stop to the politicized decision-making that has become all too frequent within the agency. H.R. 1104 passed unanimously and will now be considered by the US Senate.

In the past, the IRS has tried to assert that 501(c)(4) groups are "persons" under the tax code, and therefore any donations to them in excess of $14,000 should trigger tax consequences to the donor. But as ATR’s Ryan Ellis has previously pointed out “No serious tax expert would say that this interpretation holds water."

The Fair Treatment for All Gifts Tax Act will prevent the IRS from assessing the gift tax on contributions to certain non-profit organizations. Americans for Tax Reform, as well as numerous other free market groups are organized under Section 501(c)(4) of the Internal Revenue Code, and were therefore affected.

This was a clearly a perversion of federal gift tax rules – the gift tax was never intended to affect voluntary donations to non-profit groups. In fact, this intimidation tactic occurred around the same time that Lois Lerner was denying conservative and Tea Party non-profits the ability to organize and get tax status, and so was a clearly an extension of the agency’s politicized targeting.

The passage of this legislation will put a stop to one pathway that the agency used to apply improper scrutiny to non-profits, and is a key victory for advocates of a fair and accountable political system. ATR applauds the unanimous passage of the Fair Treatment for All Gifts Tax Act, and urges the Senate to quickly pass this much-needed legislation.

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McConnell: IRS Needs to be Reined In

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Posted by Alexander Hendrie on Wednesday, April 15th, 2015, 4:37 PM PERMALINK

Senate Majority Leader Mitch McConnell concluded ATR’s annual tax press conference with a strong call to rein in the IRS and the Obama administration, which “believes that pursuit of their objectives justifies almost any way of doing it.”

The full text of McConnell’s remarks are below:

“Let me lead off by thanking you for the great work ATR has done over the years in keeping the issue of the IRS and tax reform front and center. It sure needs to be kept front and center, given the behavior of the current administration over the last six years.

Not only has the President succeeded in raising a lot of taxes, you have the -- the issue of the agency itself selectively targeting the President's political adversaries with audits and the like. This is an agency that needs to be reined in. As long as we have the agency, it ought to be a benign tax collector, not a pursuer of any administration's political adversaries.

Now that we're in the majority in both the House and Senate, I fully expect both the Ways and Means and -- Committees and the Finance Committee to continue to pursue these examples of abuse. But I'm going to say this, any effort by the President to kind of put it off on the agency doesn't work. In fact, when they were targeting Tea Party groups, the administration was actually publicly asking them to do what they did. And, if I were being pursued by a prosecutor and I worked at IRS, I think my first defense would be, well, you know the President was saying this is what we ought to do. And as Senator Durbin and others were saying, 'this is what we ought to do.'

So I think we have an administration here that believes that pursuit of their objectives justifies almost any way of doing it.

And so there's been no organization in our country who's kept the issue of high taxes and IRS abuse more in the public eye than ATR. And so, Grover, I wanted to come by and thank you for what you all are doing. Let's keep it up. Hopefully, in the next few years we can begin to slim down the size of government and get taxes lowered once again. Thanks a lot."


Photo Credit: Anna Sortino

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Sen. Mike Lee Calls for Aggressively Pro-Growth Tax Reform

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Posted by Alexander Hendrie on Wednesday, April 15th, 2015, 4:26 PM PERMALINK

At an Americans for Tax Reform press conference in the U.S. Capitol, conservative hero Senator Mike Lee (R-Utah) called attention to the tax burden faced by Americans and called for “aggressively pro-growth” tax reform. Sen. Lee noted that Americans “work three or four months out of every year just to pay their tax bills.” 

In introducing Sen. Lee, ATR president Grover Norquist spoke of taxation’s role in the founding of our country: "Before the country was founded in 1774, we were paying 1 to 2 percent of our income in taxes. This was considered outrageous, they were thinking of moving maybe to 3% and the guns came out and we told the British to leave. They, by the way, were paying 20 percent in London. The guys in London were paying 20 percent in order to repress us and tell us what to do and we paid 1 to 2 percent.

Since then, there's been some backsliding and I'm going to ask Senator Mike Lee to come explain why we went from 1 to 2 percent up to about 30 percent of our income being taken, and what are we going to do about it because something needs to be done. This has not been moving in the right direction for a while."

Senator Lee said: "Thank you, very much, Grover. I appreciate your leadership on this as well as that of ATR, the House Ways and Means Committee, and also the Senate Finance Committee. But we live in a country that has, as you referred to, increasingly been overrun by tax burden. On the eve of tax day, we see our tax freedom day going further and further into the year. We see Americans working three or four months out of every year just to pay their tax bills. This was not always the case, as you pointed out, that from the founding, we -- we paid a very small percentage of our GDP in taxes. But over the couple of centuries since then, we've seen the growth of government explode and that has all been facilitated by a tax code, one that has some serious problems."

One of them relates to its complexity. The fact that, together with its implementing regulations, it takes up tens of thousands of pages. The overall tax burden is substantial, forcing people to spend months out of every year just working for the government.

There are also other problems that relate to the fact that it punishes people for being married. It punishes people for having children. The marriage tax penalty and the parent tax penalty are horrible burdens, horrible disincentives for the very kind of behavior that we ought not be punishing. And so we need tax reform, we need simplification, and we need the kind of reform this aggressively pro-growth and that is pro- family. Our republic requires nothing less."

Norquist then praised Sen. Lee on the landmark Rubio-Lee tax reform plan: “Your leadership with Senator Rubio on the legislation is a powerful pro-growth, pro-family reform for the tax code.”

ATR has praised the Rubio-Lee plan here and here.


Photo Credit: Anna Sortino

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IRS Buys Nerf Footballs, Doesn't Even Use Them

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Posted by Alexander Hendrie on Wednesday, April 15th, 2015, 1:00 PM PERMALINK

Using an official agency credit card, the IRS wasted taxpayer funds by spending $119 on Nerf footballs for a “team building exercise," according to a report by the Treasury Inspector General for Tax Administration (TIGTA). Even worse, the IRS did not even use the footballs, which according to the report are currently sitting in an IRS filing cabinet somewhere deep within the bowels of the agency:

“Nerf footballs purchased for a team-building exercise but never used and currently stored in a filing cabinet.”

The same report also details dozens of other questionable purchases made with IRS credit cards, including Thomas the Tank Engine rubber wristbands, the world's largest crossword puzzle, and "related alcohol purchases".

Photo Credit: TIm Ellis

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Hatch Letter to IRS Chief: Explain Your Spending Decisions

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Posted by Alexander Hendrie on Tuesday, April 14th, 2015, 5:06 PM PERMALINK

Senate Finance Committee Chairman Orrin Hatch (R-Utah) today sent a letter to the IRS questioning the agency's spending decisions. IRS Commissioner John Koskinen continues to make excuses claiming that unless the IRS receives more taxpayer funds, the agency will continue to ignore 60 percent of taxpayer calls. However, Chairman Hatch notes several areas the IRS has been making wasteful spending decisions:

  • $4.3 million spent on “market research” and “public opinion” polling last fiscal year;
  • Over $8,000 spent on a “fitness equipment stair climber,” which I assume is in a building with actual stairs;
  • Thousands of dollars spent on “decorative and give-away items,” such as plush animals, toy footballs, and “kazoos, bathtub toy boats, and Thomas the Tank Engine rubber wristbands, for managers’ meetings.”
  • Nearly $4 million spent on office furniture last fiscal year.

As Chairman Hatch’s letter says, the IRS’s level of service has become so poor that the agency is hanging up on taxpayers, and turning away others. As the letter states:

More recently, several news articles have detailed stories of IRS employees turning away those seeking help with their tax filings and hanging up on callers – something your agency bizarrely calls “courtesy disconnects.”

Given the numerous instances of wasteful government spending by the IRS, it is difficult to agree with the claim that they desperately need more funding. In fact, the National Taxpayer Advocate, an independent watchdog has found that the IRS is unable to justify its allocation of taxpayer funds and has come under scrutiny by oversight organizations for its past resource allocation.

Photo Credit: Gage Skidmore