ATR

Arizona Republicans Committed to Preventing Unintended Tax Increase

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Posted by ATR on Friday, May 24th, 2019, 3:56 PM PERMALINK

Arizona Republicans are taking advantage of a unique opportunity to make their state a more attractive place to live and invest and, more importantly, protecting taxpayers across the Grand Canyon State from an income tax hike. 

As an unintended consequence of the federal Tax Cuts and Jobs Act (TCJA) – which significantly reduced individual and corporate income taxes and resulted in 90 percent of wage earners having higher take-home pay and the lowest unemployment in 50 years – Arizonans will be left facing a tax hike at the state level if no actions are taken to prevent it.

Due to the way Arizona’s tax code conforms to the federal tax code, simply conforming to the new federal code would result in a net income tax increase unless lawmakers include provisions to offset it. Fortunately for taxpayers, Republicans in both chambers have remained committed to following the lead of lawmakers in other states, such as Iowa, Georgia, and Michigan, and finding a way to return the conformity revenue back to the taxpayers.

Grover Norquist, president and founder of Americans for Tax Reform, sent lawmakers a letter in support of this efforts. The full text of the letter is pasted below:

May 24, 2019

To: Members of the Arizona Senate

From: Americans for Tax Reform

 

Re: Protect Arizona Taxpayers

Dear Senator,

On behalf of Americans for Tax Reform (ATR) and our supporters across Arizona, I urge you to keep taxpayers in mind as the 2019 legislative session comes to close. Legislation that would result in a net tax increase will be scored as a violation of the Taxpayer Protection Pledge.

As an unintended consequence of the federal Tax Cuts and Jobs Act (TCJA) – which significantly reduced individual and corporate income taxes and has resulted in 90 percent of wage earners having higher take-home pay and unemployment hitting a 50-year low – Arizonans will be left facing a tax increase at the state level if no actions are taken to prevent it.

Due to the way Arizona’s tax code conforms to the federal tax code, simply conforming the state code to the new federal code would result in a net tax increase unless rate reductions or other provisions are included to offset it. Fortunately, legislators in both chambers have remained committed to doing just that by following the lead of lawmakers in other states, such as Iowa and Georgia, and returning this portion of their constituents’ federal tax cut back to them in the form of pro-growth tax reform.

One proposal would both hold taxpayers harmless and make Arizona’s tax code more competitive by collapsing Arizona’s five individual income tax brackets into three, taking the rates from 2.59, 2.88, 3.36, 4.24, and 4.54 down to 2.85, 3.35, and 4.38. Importantly, this proposal would also increase the standard deduction from $5,300 to $12,000 for individual filers and $10,600 to $24,000 for those filing jointly.

The larger standard deduction would expand the zero bracket and ensure that most low-income earners still receive a tax cut.

In addition to preventing an income tax hike, this proposal would make Arizona more conducive to economic growth. A lesser-circulated fact is that many small businesses file under the individual tax code. As such, a lower top individual income tax rate would allow business owners to keep their resources invested in jobs, wages, and businesses operations rather than bloated government spending programs. 

This three-bracket proposal or similar proposals to offset the tax increase that would result from conforming to the federal tax code would be a step in the right direction for Arizona taxpayers and should be supported, so long as all of the tax changes in the bill score as revenue neutral on net at most.

ATR applauds your commitment to using pro-growth tax reform as a way to return the excess revenue that will be collected from conforming Arizona’s tax code to the federal tax code back to taxpayers. Legislation that would result in a net tax increase should be rejected on principle and will be scored as a violation of the Taxpayer Protection Pledge.

 

Sincerely,

Grover Norquist
President
Americans for Tax Reform

Photo Credit: Gage Skidmore/Flickr


Yellen Claims She Still Does Not Know Who Stole Thousands of Private IRS Files

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Posted by ATR on Tuesday, November 30th, 2021, 3:50 PM PERMALINK

[See Also: Here's your handy cheat sheet on the Big Dem Tax and Spend Bill]

As the Biden administration seeks a dramatic increase in the size and power of the IRS, today Treasury Secretary Janet Yellen said she still does not know who stole the private taxpayer files of thousands of Americans, or who gave the files to the progressive group, ProPublica. The files cover at least 15 years worth of data, described by ProPublica as "a vast trove."

Yellen said: “We don’t know what the source of the leak of that information was, and I would say it’s premature to indicate that it came from the IRS.” 

It doesn't seem like there is a sense of urgency to get to the bottom of things. Meanwhile Democrats push for more IRS power, more IRS agents, more IRS audits.

When the existence of the "trove" was announced on June 8, IRS Commissioner Charles Rettig said under oath that an investigation was already underway:

I can confirm that there is an investigation with respect to the allegations that the source of the information in that article came from the Internal Revenue Service. Upon reviewing the article, the appropriate contacts were made as you would expect. And the investigators will investigate." (1:08:12)

Sen. Chuck Grassley (R-Iowa) followed up and asked (1:09:42):

"When you said that you are investigating this ProPublica release of secret IRS files, I assume that if your investigation finds a violation of the law, you are going to see that people are prosecuted, is that right?"

Rettig replied:

"Absolutely."

It's been nearly six months, and still there is nothing but radio silence, all while the American people are supposed to just shrug and accept the imposition of enormous new IRS powers -- including bank account snooping -- as proposed by Democrats in their tax and spend blowout bill. Over the decades, the IRS has proven to be unable or unwilling to safeguard taxpayer data.

Here is a timeline of Yellen's statements on the matter:

June 16, 2021 Janet Yellen: "We don't have any facts at this point," she said. "But it is absolutely a top priority to safeguard taxpayer data."

June 23, 2021 (44:00) Janet Yellen: “Let me just say one final word about the IRS. Many of you have expressed concern about the recent ProPublica report. I am deeply troubled by it as well. And it’s important to stress that an unauthorized disclosure of taxpayer information is a crime and that it has been referred to the FBI, federal prosecutors, and treasury department oversight authorities. We don’t yet know what occurred, but all is being done to get to the bottom of this criminal activity and we will be sure to update you as we learn more.” 

September 28, 2021 (2:12:06) Janet Yellen: “The ProPublica information represented an illegal revelation of taxpayer information. It’s an illegal act. And it is being investigated thoroughly by independent entities, law enforcement, and the inspector generals of Treasury and the IRS. And there really can’t be tolerance for that.”

“Just to be clear: we do not know the ProPublica information came from the IRS. That hasn’t been established.”

September 30, 2021 Rep. David Kustoff (R -Tenn): “How did ProPublica publish and obtain the information from the IRS about taxpayer information?”

Janet Yellen: “Independent agencies and law enforcement are currently looking into that and attempting to figure out how that occurred. That is clearly a crime and an utterly unacceptable thing and it will be prosecuted when it’s understood.”

November 30, 2021 Janet Yellen (1:50:59): “There are independent agencies, both within Treasury, the inspector General, also the FBI and DOJ, that are conducting investigations. We’re not privy, nothing has been reported out yet from those investigations that I’m aware of, but I believe those investigations are moving forward”

Janet Yellen (1:51:58): “We don’t know what the source of the leak of that information was, and I would say it’s premature to indicate that it came from the IRS.” 

Photo Credit: Federalreserve


ATR Op-Ed in Townhall: How Stablecoins Can Help the Underbanked

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Posted by ATR on Monday, November 22nd, 2021, 10:31 AM PERMALINK

In an op-ed published in Townhall yesterday, ATR Federal Affairs Manager Bryan Bashur outlined how stablecoins (digital tokens backed by reserve assets such as the U.S. dollar or short-term debt) can provide financial services to Americans who have previously lacked easy access to capital.

Lower-income individuals, minorities, and rural communities are the most likely to benefit from access to digital assets. As Bashur explains:

According to a Morning Consult poll, 37 percent of the underbanked population own cryptocurrency compared to only 10 percent of individuals who are fully banked.

Most importantly, the unbanked or underbanked individuals in the United States tend to be minorities. Black and Hispanic households are about five times as likely to be unbanked as white households. According to a survey conducted by the Federal Deposit Insurance Corporation (FDIC), in 2019 “unbanked rates were higher among lower-income households, less-educated households, Black households, Hispanic households, American Indian or Alaska Native” households.

Rural communities are also more likely to lack access to financial services. The FDIC reported that “64.6 percent of rural households used bank credit, compared with 69.2 percent of urban households and 77.3 percent of suburban households.”

Finally, low-income households are also disconnected from banking. The FDIC found that “only 37.0 percent of households with less than $15,000 in income used bank credit, compared with 89.9 percent of households with income of $75,000 or more.”

Unfortunately, the Biden administration opposes the development of stablecoins and the innovative financial services that they can offer. Bashur points out that:

This month, the President’s Working Group on Financial Markets, the FDIC, and the Office of the Comptroller of the Currency (OCC) published a report on stablecoins that asked Congress to pass legislation that would only allow federally insured depository institutions to issue stablecoins. The report also says that the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have broad authority to regulate stablecoins.

Biden’s Office of the Comptroller of the Currency (OCC) has been particularly opposed to stablecoin development and promotion. Bashur states that:

Following the publication of the Biden administration’s report on stablecoins, Acting Comptroller of the Currency, Michael Hsu, recently said that stablecoin development is “not what you want” and that the outcomes of innovation are “not going to be good.”

Fortunately, some groups have the right idea when it comes to protecting investors while also encouraging the usage of stablecoins. The Cato Institute has written a detailed framework that avoids burdensome regulations but requires adequate disclosures so that bad actors will not take advantage of investors. Bashur explains that:

The framework would amend current statute so that issuers of digital tokens are regulated as “limited purpose investment companies” and have certain collateral requirements they must meet. The proposal would also require the issuers to disclose “a detailed explanation of its reserve holdings” including the value of the assets and the percentage of each asset. For example, how much of the stablecoin is backed by the U.S. dollar versus short-term debt.

Bashur concludes by stating that any new regulatory framework should promote stablecoin innovation, expand access to financial services for the underbanked, and provide safeguards for crypto investors.

Click here to read the full op-ed.

Photo Credit: "Tether USDT" by The Focal Project is licensed under CC BY-NC 2.0

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ATR Op-Ed in RealClearMarkets: Emphasis On ESG Investing Will Compromise Future Retirements

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Posted by ATR on Friday, November 19th, 2021, 1:41 PM PERMALINK

In an op-ed published in RealClearMarkets today, ATR Federal Affairs Manager Bryan Bashur highlighted the Biden administration’s misguided initiative to weaponize environmental, social, and governance (ESG) investing strategies.

Biden’s support for ESG will kill energy jobs and put Americans’ retirement savings at risk. As Bashur points out:

Within his first week in office, President Biden issued an executive order on “Tackling the Climate Crisis at Home and Abroad.” Among the provisions in the EO, one directive mandates the Export-Import Bank, the U.S. International Development and Finance Corporation, the State Department, Treasury Department, and Energy Department to develop a plan to “[promote] the flow of capital toward climate-aligned investments and away from high-carbon investments.” 

In May, Biden issued another order on “Climate-Related Financial Risk.” The EO aims to redistribute capital away from oil and gas companies that employ hundreds of thousands of Americans to subsidize special interest groups backed by the top 1 percent. 

Diversion of capital to ESG investment products is more expensive and produces lower returns than non-ESG counterparts. As Bashur explains:

Greater capital flow to ESG funds is beneficial for institutional investors because they offer high fees. As the Wall Street Journal aptly pointed out, exchange-traded funds that invest in ESG products have 43 percent higher fees than other ETFs. 

At the same time, returns on ESG-driven investment strategies risk being lower than is the case with their more traditionally run counterparts. According to Pacific Research Institute research, $10,000 invested in an ESG fund would be around 44 percent lower than an investment in a fund that tracks the S&P 500 for ten years

In fact, some industry experts such as Tariq Fancy, a former chief investment officer for sustainable investing at BlackRock, believe that “the ESG industry today consists of products that have higher fees but little or no impact and narratives that mislead the public.”

The Trump administration understood that political virtue signaling does not belong in investment decision-making and issued rulemakings to combat it. Unfortunately, the Biden administration is unravelling their good work. Bashur states that:

Biden’s Department of Labor decided to reverse course and prioritize woke investing strategies over maximizing returns for retirement accounts. Biden is effectively allowing pension plan managers to redefine their fiduciary duty to the plan beneficiaries, in the name of ESG and other forms of socially responsible investing, a move that may well mean that could hit the amount in a beneficiary’s pension pot when the time comes to retire.  

Fortunately, some politicians understand the issues with politically charged investing strategies. The Texas legislature, for example, passed a bill to ensure retirement accounts continue to maximize returns. Bashur underscores that:

Under the new Texas law, retirement funds will not be subjected to using taxpayer dollars to pay high fees for ESG products more focused on political initiatives than creating real economic value for employees. 

Bashur concludes by stating that Biden should be more focused on ensuring that Americans can maximize the amount of money in their retirement savings and not cater to special interest groups and Wall Street banks.

Click here to read the full op-ed.

Photo Credit: "West Texas Pumpjack" by Jonathan Cutrer is licensed under CC BY-NC 2.0

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50-State List of Top Tax Rates Under Democrat Bill

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Posted by ATR on Monday, November 8th, 2021, 5:40 PM PERMALINK

If the Democrats' tax-and-spend reconciliation bill is enacted, the average top tax rate on personal income would rise to 57.4 percent, according to the Tax Foundation.

This would give the U.S. the highest tax rate in the developed world, and stick all 50 states with a combined federal-state tax rate higher than 50 percent.

The combined federal and state top marginal income tax rates for each state under the Democrat bill are listed below. Please visit the Tax Foundation website for a handy map of the below rates compiled by Alex Durante and William McBride:

New York: 66.2%

California: 64.7%

New Jersey: 63.2%

Hawaii: 62.4%

Washington, DC: 62.2%

Oregon: 62%

Minnesota: 61.3%

Maryland: 60.4%

Vermont: 60.2%

Kansas: 59.6%

Delaware: 59.3%

Ohio: 59.1%

Wisconsin: 59.1%

Kentucky: 58.9%

Iowa: 58.6%

Maine: 58.6%

Connecticut: 58.4%

South Carolina 58.4%

Pennsylvania: 58.3%

Montana: 58.2%

Nebraska: 58.2%

Michigan: 58.1%

Idaho: 57.9%

Illinois: 57.9%

West Virginia: 57.9%

Missouri: 57.8%

Indiana: 57.5%

Rhode Island: 57.4%

Arkansas: 57.3%

New Mexico: 57.3%

Georgia: 57.2%

Virginia: 57.2%

North Carolina: 56.7%

Alabama: 56.4%

Massachusetts: 56.4%

Mississippi: 56.4%

New Hampshire: 56.4%

Utah: 56.4%

Oklahoma: 56.2%

Colorado: 56%

Arizona: 55.9%

Louisiana: 55%

North Dakota: 54.3%

Alaska: 51.4%

Florida: 51.4%

Nevada: 51.4%

South Dakota: 51.4%

Tennessee: 51.4%

Texas: 51.4%

Washington: 51.4%

Wyoming: 51.4%

See also:

Dem Plan Will Impose Highest Tax Rate in the Developed World

Dems Still Pushing IRS Bank Snooping Proposal, According to Biden Official

Dem Bill Gives Special Tax Handout for Reporters

Dem Bill Imposes Tax Hikes On Vaping Products, in Violation of Biden Tax Pledge

Dem Bill Includes $900 Handout for "Electric Bicycles"

Dem Bill Imposes Price Controls and 95% Excise Tax on Medical Innovation

Dem Bill Imposes Corporate Tax Hike Which Will be Borne by Working Families

 

 

 

 

Photo Credit: Gage Skidmore licensed under CC BY-SA 2.0


ATR Leads Coalition Letter Opposing Biden's Banking Regulator Nominee

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Posted by ATR on Friday, November 5th, 2021, 1:08 PM PERMALINK

Today, Americans for Tax Reform led a coalition letter to the Senate Committee on Banking, Housing, and Urban Affairs, opposing President Biden's nominee to serve as the head of the Office of the Comptroller of the Currency (OCC), Saule Omarova. 

"President Biden’s nominee to head the OCC is one of the most radical picks he has made since his time in office. Saule Omarova’s adoration for big government and desire to eliminate private banking in the United States is evidenced by her writings. It would be a mistake for the United States Senate to confirm someone whose policy ideas would restructure the banking system in such a way that would eliminate free market enterprise and surely cripple an economy that is already struggling to fend off inflation and the economic repercussions of the COVID-19 pandemic," said Grover Norquist, President of Americans for Tax Reform. 

The OCC is an independent bureau housed within the Treasury Department, which "charters, regulates, and supervises all national banks, federal savings associations, and federal branches and agencies of foreign banks."

Townhall also published an ATR op-ed underscoring concerns that both Republicans and Democrats have with Omarova. 

Text of the coalition letter can be read below:

November 5, 2021

 

The Honorable Sherrod Brown                                 

Chairman                                                                   

Senate Committee on Banking, Housing, and Urban Affairs

534 Dirksen Senate Office Building                         

Washington, D.C. 20510                   

 

The Honorable Patrick Toomey

Ranking Member

Senate Committee on Banking, Housing, and Urban Affairs

534 Dirksen Senate Office Building                         

Washington, D.C. 20510

 

Dear Chairman Brown and Ranking Member Toomey:

The undersigned organizations oppose the nomination of Saule Omarova to head the Office of the Comptroller of the Currency (OCC).

Omarova will undoubtedly expand the size, scope, and authority of the OCC to the limit. There is also no question that she will advocate for instituting a cultural shift in the banking industry that will drive private financial institutions out of business and centralize all financial power with the federal government, all in the name of “equity.”

If Omarova is confirmed to the position, she will be able to serve a five-year term as comptroller of the currency. As comptroller, Omarova would head the bureau that “charters, regulates, and supervises all national banks, federal savings associations, and federal branches and agencies of foreign banks.”

As you are aware, Omarova is a Cornell University law professor who graduated from Moscow State University and is a recipient of the Lenin Personal Academic Scholarship.

On her resume, Omarova states that she was a senior fellow at the Berggruen Institute from 2020-2021. The think tank was founded by Nicholas Bergguren, a self-proclaimed Marxist, and has a history of promoting Chinese communist propaganda in the news. Fox Business also reported that Omarova appears to have joined a Facebook group called Marxist Analysis and Policy. The group describes itself as “a platform for analysis, policy and polemics from the perspectives of a diverse range of Socialist and anti-capitalist views.”

What is most concerning about Omarova is that she would use her role to push “equity” policies that increase the federal government’s footprint in the market. Most notably, Omarova has advocated for the Federal Reserve to provide deposits and lending for individuals in the country—crowding out any private banking opportunities in the United States. Omarova has explicitly stated her support for replacing private bank deposits with the Federal Reserve in the name of “equity.” Omarova says that, “the ultimate ‘end-state’” in her writing is where “FedAccounts fully replace—rather than compete with—private bank deposits.” This would be a total overhaul of the banking system in the United States, effectively eliminating all free market competition in the banking system.

Consolidating all deposits under the aegis of the Federal Reserve would be devastating for community banks. The Federal Deposit Insurance Corporation (FDIC) pointed out that in 2019 on average 84 percent of community banks’ assets were funded with deposits. Omarova would effectively eliminate the main source of financing for small businesses and rural communities while Wall Street banks would continue to thrive off underwriting fees, M&A, and securities trading.  

Omarova also harbors resentment toward the banking industry she has been tapped to regulate. In a CBC produced documentary entitled, Assholes: A Theory, Omarova expresses her bias toward the private banking industry. Omarova describes the financial services industry as “a quintessential asshole industry” with the goal of making “certain types of asshole behavior systemically unprofitable” so that this “behavior will naturally kind of fall away.” This explicit bias against the industry by itself should make her unqualified for the position she has been nominated for.

Additionally, Omarova has advocated for increased centralization of the American economy. In a 2016 paper she co-authored, Omarova states her belief that the federal government of the United States is best suited to regulate prices of commodities such as “fuels, foodstuffs, and some other raw materials” and “wage or salary indices.” These “systemically important prices and indexes”, in her opinion, are the key to promoting financial market stability. This radical proposal would convey unprecedented authority to federal financial regulators to the extent that the financial markets in the United States would be totally controlled by the federal government.

Omarova is not shy about expanding the size of the federal government. For example, in an article she wrote in April of 2020, Omarova stated the need for a new permanent federal agency to bail out companies during crises. Omarova states that “having a permanent institutional platform for coordinating the national crisis response, including bailouts of private companies, would help to ensure that these emergency measures are executed in an efficient, transparent, and democratically accountable, and socially just manner.” Omarova calls this agency the National Investment Authority. She envisions this new centralized investment juggernaut to “act directly in financial markets as a lender, guarantor, securitizer, and venture capitalist with a broad mandate to mobilize, amplify, and direct public and private capital to where it’s needed most.” So, the federal government gets to decide where capital should be allocated, not private banks who have actual shareholders that will hold them accountable. 

Omarova is also critical of cryptocurrencies. In an article Omarova wrote for the Harvard Law School Forum on Corporate Governance, she claims that cryptocurrencies contribute to financial instability, fail to produce “activity in the real economy,” and “fuel financial speculation on an unprecedented scale.” In light of her opinions on cryptocurrencies, it is unlikely that Omarova would be supportive of potential proposals to engender greater collaboration or partnerships between fintechs and national banks. She would also likely support the development of a central bank digital currency to crowd out private tokens and push all crypto innovation out of the United States.

Senators should oppose Omarova and vote against her nomination to serve as the head of the OCC. The Senate needs to avoid confirming someone to the helm of the OCC that will overhaul the national banking system to reflect that of a totalitarian regime.

 

Sincerely,

 

Grover Norquist

President, Americans for Tax Reform

 

Ryan Ellis

President, Center for a Free Economy

 

David M. McIntosh

President, Club for Growth

 

Andrew F. Quinlan

President, Center for Freedom and Prosperity

 

Phil Kerpen

President, American Commitment

 

Carrie Lukas
President, Independent Women’s Forum

Heather R. Higgins
CEO, Independent Women’s Voice

 

Tom Hebert

Executive Director, Open Competition Center

 

Bryan Bashur

Executive Director, Shareholder Advocacy Forum

 

Katie McAuliffe

Executive Director, Digital Liberty

 

Andrew Langer

President, Institute for Liberty

 

Dick Patten

President, American Business Defense Council

 

Seton Motley

President, Less Government

 

Jeffrey Mazzella

President, Center for Individual Freedom

 

Thomas Jones

Founder, American Accountability Foundation

 

James L. Martin,

Founder/Chairman, 60 Plus Association

 

Saulius “Saul” Anuzis,

President, 60 Plus Association

 

Dave Wallace

President, FAIR Energy Foundation

 

John Berlau

Senior Fellow, Competitive Enterprise Institute

 

David Williams

President, Taxpayers Protection Alliance

 

Photo Credit: "The Treasury Department" by Robert Lyle Bolton is licensed under CC BY 2.0

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Dems Still Pushing IRS Bank Account Snooping, Says Treasury Official

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Posted by ATR on Wednesday, November 3rd, 2021, 5:07 PM PERMALINK

Despite firm opposition from the American people, the Biden administration and congressional Democrats are still trying to insert IRS bank account snooping into the reconciliation bill, a top Treasury official said Wednesday during a panel sponsored by the Center for American Progress.

The Biden administration has proposed to give the IRS new power to automatically access bank account, Venmo, Paypal, and CashApp account inflows and outflows for all business and personal accounts with more than $600 in total deposits and withdrawals for what it describes as a "comprehensive financial account reporting regime." This would inevitably increase audits on taxpayers making less than $400,000 per year.

Natasha Sarin, Deputy Assistant Secretary for Economic Policy at the U.S. Treasury Department, said Democrats were "trying to get this past the finish line." 

Sarin said:

"It won't surprise you to hear that I think that the information reporting provisions were an incredibly important part of the compliance agenda. And I think that without them there's a lot of good that's going to be done, but honestly a lot of good that we won't be able to do unless we have some light into these opaque income streams.

And so I'm hopeful that what we'll see over the course of the next few weeks -- there's a very committed group of senators -- Senators Kaine, Warner, and Carper who are very committed along with of course Chair Wyden and Senator Warren and many others trying to get this past the finish line. I think there are ways that we can get there and that we're going to be able to provide the IRS both information and resources that are going to fundamentally overhaul the way tax administration works in this country, all for the better."

Click here to view the clip, which starts at 56:20 in the video

Not only are Americans creeped out by President Biden's plan to have the IRS snoop on their bank accounts, the nation's most prominent progressive tax policy group says the plan won't even work.

The Tax Policy Center says the plan is "poorly conceived," and will "bury the agency in a sea of unproductive information" and "won't help" and "will fail."

On Oct. 19 Tax Policy Center senior fellow Steve Rosenthal wrote on Twitter

"Biden's Treasury doubles-down on a poorly-conceived reporting proposal, casting its net far too wide, which may catch small businesses, but not the big fish (who cheat by stretching the tax law, not by hiding their cash flow). I tried to help at the start, but I gave up."

On Oct. 20 Rosenthal wrote on Twitter

"If Congress wants to collect more money from the rich, it must pass better tax rules, which measure and time income accurately and do not create ambiguities that aggressive taxpayers and their highly-paid advisers can exploit. Bank reports on aggregate cash flows won't help."

On Oct. 16 Rosenthal was quoted in The Hill

Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center, whose former director now works in the Biden administration, said the proposal is too expansive and thinks bank lobbyists “have touched a raw nerve” with their customers who are concerned about privacy.

“I think at the end of the day, this bank proposal will fail,” he said.

On May 3, Rosenthal wrote:

"In practice, the IRS’ task would be daunting and, in fact, bury the agency in a sea of unproductive information.

Biden’s plan is expansive: deposits and withdrawals must be reported for every account, individual or business, at every financial institution. Then, to construct taxpayer-specific information, the IRS must collate taxpayer-account information across many different financial institutions. That is because taxpayers often hold multiple accounts. Yet, whether collated or not, deposits and withdrawals are not income, unlike wages or interest. And deposits and withdrawals cannot be netted to calculate income, without substantial adjustments."

On Oct. 18 Rosenthal was quoted in The Washington Post:

"It’s still a deeply flawed proposal,” Rosenthal said. “Even at $10,000, the Biden bank proposal is still too sweeping, throws a net very wide, and it’s hard to see what fish they want to catch here.”

Biden wants to increase IRS funding by $80 billion to double the size of the IRS and hire 87,000 new auditors and agents. This quantity of agents is so large that it could fill every seat in Washington DC's Nationals Park, twice. It could fill the ancient Colosseum 1.74 times. 87,000 new IRS agents is more than the entire personnel on all 11 U.S. aircraft carriers.

Even Obama-era IRS chief John Koskinen – a longtime advocate of increasing the IRS budget – thinks Biden’s proposal is too much.

As reported by the New York Times:  

“I’m not sure you’d be able to efficiently use that much money,” Mr. Koskinen said in an interview. “That’s a lot of money.”  

Rather than fix the agency's longstanding mismanagement, ineptitude and abuse problems, Biden's approach will make the problem worse.

A recent HarrisX poll found that 70% of independents opposed the bank snooping provision.

Americans have a firm, categorical objection to the IRS snooping in their bank accounts.

Here are some quotations from a local news compilation from around the country:

“I don’t see what business it is of anyone’s what I spend out of my bank account."

“No, it’s not their business. I already tell them enough.” 

 “I don’t feel that’s appropriate, that the IRS should be looking into people’s bank accounts.”

“They’re trying to get in to see every little thing you’re doing.”

“It could be a little invasive.” 

“It’s kind of over the top and I just think that it’s an invasion of privacy.”

“Our bank accounts, you’d think would be somewhat private if you’re just a regular Joe Schmo making money week-to-week.”

“I do not think the government should be intervening in individual bank accounts.”

“It is personal information, that’s why we file taxes, too. You know, they should not have access to all that stuff.”

“I don’t think it’s right, it’s not their business what’s in my bank account.” 

Click here to view.


Workers Bear Cost of Dem Corporate Tax Hike

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Posted by ATR on Thursday, September 30th, 2021, 12:18 PM PERMALINK

Let's review the economic research:

The Joint Committee on Taxation recently testified that 25% of the burden of the corporate tax is borne by labor in terms of diminished wage growth. Testifying before the House Ways & Means Committee, JCT Chief of Staff Thomas A. Barthold said:

"Literature suggests that 25% of the burden of the corporate tax may be borne by labor in terms of diminished wage growth."

A 2012 Harvard Business Review piece by Mihir A. Desai notes that raising the corporate tax lands “straight on the back” of the American worker:

"Because capital is mobile, high tax rates divert investment away from the U.S. corporate sector and toward housing, noncorporate business sectors, and foreign countries. American workers need that capital to become more productive. When it’s invested elsewhere, real wages decline, and if product prices are set globally, there is no place for the corporate tax to land but straight on the back of the least-mobile factor in this setting: the American worker."

According to the Stephen Entin of the Tax Foundation, workers bear an estimated 70 percent of the corporate income tax. He wrote in 2017:

"Over the last few decades, economists have used empirical studies to estimate the degree to which the corporate tax falls on labor and capital, in part by noting an inverse correlation between corporate taxes and wages and employment. These studies appear to show that labor bears between 50 percent and 100 percent of the burden of the corporate income tax, with 70 percent or higher the most likely outcome."

A 2012 paper at the University of Warwick and University of Oxford found that a $1 increase in the corporate tax reduces wages by 92 cents in the long term. This study was conducted by Wiji Arulampalam, Michael P. Devereux, and Giorgia Maffini and studied over 55,000 businesses located in nine European countries over the period 1996-2003:

"We identify this direct shifting through cross-company variation in tax liabilities, conditional on value added per employee. Our central estimate is that $1 of additional tax reduces wages by 92 cents in the long run. The incidence of a $1 fall in value added is smaller, consistent with our wage bargaining model."

A 2015 study by Kevin Hassett and Aparna Mathur found that a 1 percent increase in corporate tax rates leads to a 0.5 percent decrease in wage rates. The study analyses 66 countries over 25 years and concludes that workers could see a greater reduction in wages than the federal government raises in new revenue from a corporate income tax increase:

"We find, controlling for other macroeconomic variables, that wages are significantly responsive to corporate taxation. Higher corporate tax rates depress wages. Using spatial modelling techniques, we also find that tax characteristics of neighbouring countries, whether geographic or economic, have a significant effect on domestic wages."

A 2006 study by William Randolph of the Congressional Budget Office found that 74% of the corporate tax is borne by domestic labor:

"Burdens are measured in a numerical example by substituting factor shares and output shares that are reasonable for the U.S. economy. Given those values, domestic labor bears slightly more than 70 percent of the burden of the corporate income tax."

A 2007 study published by the Kansas City Fed estimated that a 1 percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. Researcher R. Alison Felix concluded that the wage reductions are over four times the amount of collected corporate tax revenue:

"The empirical results presented here suggest that the incidence of corporate taxation is more than fully borne by labor. I estimate that a one percentage point increase in the marginal corporate tax rate decreases annual wages by 0.7 percent. The magnitude of the results predicts that the decrease in wages is more than four times the amount of the corporate tax revenue collected."

Even the left-leaning Tax Policy Center estimates that 20 percent of the burden of the corporate income tax is borne by labor:

"In calculating distributional effects, the Urban-Brookings Tax Policy Center (TPC) assumes investment returns (dividends, interest, capital gains, etc.) bear 80 percent of the burden, with wages and other labor income carrying the remaining 20 percent."

President Biden and the Democrats pretend the tax will just disappear into the ether, but the facts are this tax increase will be borne by workers.

 

Photo Credit: vonderauvisuals


Yellen: Private Taxpayer Info Published by ProPublica "an illegal revelation of taxpayer information"

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Posted by ATR on Wednesday, September 29th, 2021, 2:42 PM PERMALINK

Testifying before the Senate Banking Committee on Tuesday Sept. 28, Treasury Secretary Janet Yellen was asked about the ability of the IRS to safeguard private taxpayer information. President Biden wants the IRS to have automatic access to personal bank account information even though the agency is unable or unwilling to safeguard the information it already has.

Yellen said:

"The ProPublica information represented an illegal revelation of taxpayer information. It's an illegal act. And it is being investigated thoroughly by independent entities, law enforcement, and the inspector generals of Treasury and the IRS. And there really can't be tolerance for that."

Despite "thousands" of people having their personal tax files stolen and given to the progressive group -- covering many years of tax filings -- Yellen claims she doesn't know if the source was the IRS itself:

"Just to be clear: We do not know the ProPublica information came from the IRS. That hasn't been established."

Stay tuned.

Photo Credit: Federal Reserve


Biden Wants IRS to Snoop on Your Bank Account: "Amounts that come into their bank accounts, and what amounts go out of their bank accounts."

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Posted by ATR on Thursday, September 16th, 2021, 5:56 PM PERMALINK

President Biden wants to impose the largest tax increase since 1968 and hire 87,000 new IRS agents and auditors. He wants them to have automatic access to information about every Americans' bank account as well as every Paypal, Venmo, and CashApp account, even if you are not accused of wrongdoing.

The IRS would automatically obtain and store the data.

On Thursday Biden tried to justify the privacy invasion by saying it was just "two pieces of information."

What are the two pieces?

Biden said:

"The amounts that come into their bank accounts, and what amounts go out of their bank accounts."

Are you comforted?

If Democrats enact the plan, banks and third-party payment providers, like Venmo, PayPal, and CashApp would be required to report ALL account holders’ aggregate account outflows and inflows to the IRS. 

The IRS will use these powers against Americans of all income levels. Requiring banks and third-party payment providers to report this kind of information is an indefensible invasion of privacy.

The mass collection of this bank account data will lead to many IRS fishing expeditions into the matters of innocent Americans. There are grave criminal justice ramifications to this proposal.

At a time when Americans are already struggling, these new reporting rules would create unnecessary burdens. As noted in this excerpt from Forbes

It may create problems, however, that should be considered and addressed as this plan works its way through Congress. For example, consider a young couple saving up to buy a home. All savings are put into the “dream home” savings account. Then, when it comes time to make the down payment, the $50,000 dream home savings goes into the regular checking account, which is then wired to the seller’s escrow account. Buying a home is not a taxable event (at least for federal income tax), selling one is. Will the IRS receive information from the financial institutions that leads to an audit? 

Paul Merski, vice president of congressional relations at Independent Community Bankers of America, voiced his criticism of the proposal: 

Banks already report millions of transactions a day to the Financial Crimes Enforcement Network in the form of currency transaction reports, in addition to suspicious activity reports, which are required when potential illicit activity is detected by a bank. Banks are required to submit currency transaction reports when a deposit or withdrawal is $10,000 or more, a threshold that’s already very low, Merski said. 

Merski said the proposal, as written, is akin to “sending your bank statement to the IRS every month,” which would be opposed by the banking industry because of the reporting burdens already required by federal regulators. 

“The federal government can’t track all of that—any more requirements would be adding more hay to that haystack,” he said. 

As also noted by the Wall Street Journal, the bank account snooping will give the IRS an "enormous" quantity of new data: 

It would also create an enormous flow of information that the IRS would have to learn how to manage and use. 

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Congress will have to weigh the potential burdens and privacy concerns against the revenue gains as it considers the plan. 

The IRS has a long and poor and track record when it comes to safeguarding taxpayer information, so it won't be long before the private bank account information is shared with outside parties such as news organizations and progressive groups.

Photo Credit: Center for American Progress Action Fund


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