Gaby Enos

List: Number of Households by State Benefiting from the Lower AMT

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Posted by Gaby Enos on Thursday, September 6th, 2018, 5:23 PM PERMALINK

  • Thanks to the tax cuts passed by the Republican House and Senate and signed into law by President Trump, millions of families are seeing increased take-home pay and simplification because of the reduction in the Alternative Minimum Tax.  
     
  • The Tax Cuts and Jobs Act increased the threshold at which the Alternative Minimum Tax hits taxpayers to $1 million for a family and $500,000 for an individual.
     
  • This will simplify the tax code for millions of Americans. According to one estimate, the number of taxpayers paying the AMT will decrease from 5 million families and individuals to just 200,000.
     
  • Under the old tax code, 4,423,880 families paid the AMT according to IRS SOI data from 2015 (the most recent year available). For instance, 901,370 families in California, 279, 740 families in New Jersey, 513,490 families in New York, and 194,780 families in Illinois paid the AMT. By reducing the AMT, the TCJA enacted important tax simplification and increased take-home pay for these families.  Specific statewide data can be found in the below:

         State              Number of Filers

United States         4,423,880

Alabama                 22,740

Alaska                    3,890

Arizona                  48,170

Arkansas                19,730

California               901,370

Colorado                70,890

Connecticut            103,330

Delaware                10,720

Florida                    156,410

Georgia                  109,540

Hawaii                    14,750

Idaho                      12,720

Illinois                    194,780

Indiana                   46,720

Iowa                       29,910

Kansas                    24,940

Kentucky               33,890

Louisiana                32,200

Maine                     14,530

Maryland                144,510

Massachusetts        173,500

Michigan                91,450

Minnesota              92,700

Mississippi              14,510

Missouri                 54,400

Montana                 9,730

Nebraska                20,550

Nevada                   15,480

New Hampshire     16,370

New Jersey             279,740

New Mexico          12,270

New York              513,490

North Carolina       102,000

North Dakota         5,340

Ohio                       122,050

Oklahoma               28,000

Oregon                   59,230

Pennsylvania          166,590

Rhode Island         15,270

South Carolina       38,870

South Dakota         4,680

Tennessee               28,410

Texas                      236,780

Utah                       24,870

Vermont                 8,060

Virginia                  149,290

Washington            67,100

West Virginia         10,550

Wisconsin               63,380

Wyoming               3,480

Photo Credit: Wall Street Journal


List: Number of Households by State Benefiting from the Doubled Standard Deduction

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Posted by Gaby Enos on Thursday, September 6th, 2018, 4:55 PM PERMALINK

  • Thanks to the tax cuts passed by the Republican House and Senate and signed into law by President Trump, millions of families are seeing lower taxes because of the doubling of the standard deduction.
     
  • The Tax Cuts and Jobs Act nearly doubled the standard deduction from $6,300 to $12,000 for an individual and $12,600 to $24,000 for a family.
     
  • Because of tax reform, the number of people taking the standard deduction will increase from 66 percent of taxpayers to 93 percent. These will result in dramatic simplification as families choose to no longer itemize deductions.
     
  • The doubling of the standard deduction also results in dramatic tax reduction for the 105,055,150 million taxpayers that took the standard deduction before passage of tax reform, according to IRS SOI data from 2015 (the most recent year available).
     
  • For instance, 2,057,890 families in Missouri, 2,396,920 families in Indiana, 7,381,270 families in Florida, and 2,076,930 families in Arizona benefit from the expansion of the standard deduction. Specific statewide data can be found in the chart below:

 

              State               Number of Filers

United States         104,180,520

Alabama                 1,520,920

Alaska                    281,390

Arizona                  2,076,930

Arkansas                954,510

California               11,639,810

Colorado                1,764,070

Connecticut            1,032,700

Delaware                308,230

Florida                    7,381,270

Georgia                  2,977,270

Hawaii                    487,460

Idaho                      518,820

Illinois                    4,231,140

Indiana                   2,396,920

Iowa                       1,024,420

Kansas                    997,220

Kentucky               1,412,530

Louisiana                1,532,990

Maine                     466,830

Maryland                1,604,370

Massachusetts        2,142,350

Michigan                3,463,240

Minnesota              1,777,460

Mississippi              953,720

Missouri                 2,057,890

Montana                 356,280

Nebraska                650,230

Nevada                   1,013,060

New Hampshire     476,010

New Jersey             2,574,770

New Mexico          710,020

New York              6,285,820

North Carolina       3,160,340

North Dakota         300,820

Ohio                       4,130,020

Oklahoma               1,246,880

Oregon                   1,193,960

Pennsylvania          4,418,190

Rhode Island           354,070

South Carolina        1,575,650

South Dakota         344,070

Tennessee               2,383,180

Texas                      9,284,760

Utah                       816,410

Vermont                 236,940

Virginia                  2,449,420

Washington            2,393,070

West Virginia            648,040

Wisconsin               1,956,470

Wyoming                   217,580

Photo Credit: H&R Block


List: Number of Households by State Benefiting from the Doubled Child Tax Credit

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Posted by Gaby Enos on Thursday, September 6th, 2018, 3:58 PM PERMALINK

  • Thanks to the tax cuts passed by the Republican House and Senate and signed into law by President Trump, millions of families are seeing lower taxes because of the doubling of the child tax credit.
     
  • The Tax Cuts and Jobs Act doubled the child tax credit from $1,000 to $2,000 per child. This expansion also simplified the tax code by consolidating other provisions into the child tax credit as part of a net tax cut.
     
  • According to IRS SOI data from 2015 (the most recent year available), 22,324,780 American families across the country take the child tax credit and benefit from tax reform doubling the credit.
     
  • For instance, 431,660 families in Missouri, 514,550 families in Indiana, 1,244,430 families in Florida, and 478,000 families in Arizona benefit from the expansion of the child tax credit. Specific statewide data can be found in the chart below: ​​​
           

          State             Number of Filers

United States      22,235,600

Alabama              331,870

Alaska                 65,540

Arizona               478,000

Arkansas             207,730

California            2,701,370

Colorado             400,830

Connecticut        220,450

Delaware             65,890

Florida                1,244,430

Georgia               690,130

Hawaii                104,070

Idaho                  134,800

Illinois                 884,790

Indiana                514,550

Iowa                    246,080

Kansas                230,830

Kentucky            318,720

Louisiana            321,160

Maine                  87,670

Maryland            407,120

Massachusetts     407,210

Michigan             647,610

Minnesota           412,780

Mississippi          211,210

Missouri              431,660

Montana                       72,100

Nebraska                    157,910

Nevada                       226,030

New Hampshire           90,820

New Jersey                563,170

New Mexico             150,070

New York              1,151,020

North Carolina         708,990

North Dakota             59,230

Ohio                        830,770

Oklahoma               294,920

Oregon                    268,640

Pennsylvania           840,120

Rhode Island             69,950

South Carolina        338,400

South Dakota            67,410

Tennessee                466,410

Texas                   2,092,560

 Utah                        278,420

Vermont                     42,460

  Virginia                    571,710

Washington               529,080

West Virginia             119,890

Wisconsin                 430,860

   Wyoming                      48,160

 

        

Photo Credit: CNN


Simplification of Tax Code Will Save Taxpayers $5.4 Billion in Compliance Costs

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Posted by Gaby Enos on Thursday, August 30th, 2018, 4:18 PM PERMALINK

The Tax Cuts and Jobs Act dramatically simplified the tax code for individuals and could save taxpayers up to $5.4 billion in compliance costs per year, as noted by a recent study released by the  Tax Foundation.
 
The TCJA doubled the standard deduction rate from $6,000 to $12,000, repealed numerous itemized deductions and reduced the scope of the alternative minimum tax. All of these simplified the tax filing process and lowered compliance costs.
 
Filing taxes is a daunting and time consuming process that costs Americans significant resources. The more complex filing an individual tax return is, the more time and money is spent filing taxes. 
 
Prior to passage of TCJA, Americans spent 2.6 billion hours complying with individual income tax and annual of tax compliance costs totaled $98.68 billion, excluding all other out of pocket filing expenses for filing software and preparation fees. 
 
There are major economic costs that come at the expense of an individual having to spend time complying with tax code rather than using that time for other productive economic activities. For instance, the National Taxpayers Union Foundation estimated that in 2017 out of pocket expenses were estimated to be $31.9 billion. These expenses included money spent on tax preparation, software and other supplies individuals use to file their taxes. 
 
The IRS estimates that the average individual taxpayer spends about 12 hours completing their tax returns and $210 on out of pocket expenses. 
 
Following passage of TCJA, the IRS estimates that there will be a four to seven percent reduction in the time spent completing an individual income tax return. This reduction would amount between 90 and 157.5 million hours saved, and when multiplied by hourly average compensation of $34.17, the compliance cost reductions amount to savings of $3.1 billion to $5.4 billion. This time and cost reduction is a net effect of all of the changes made to individual income taxes in the TCJA – expanded standard reduction rate and AMT reforms.
 
Because of tax reform, it is estimated that there will be 9 million fewer AMT forms that will be filed. 
 
AMT reforms alone are estimated to save $8.5 billion in compliance costs. Those who file AMT forms are shown to spend almost double the amount of time filing taxes than those who do not. Thus, if it takes 15 or more hours to file an AMT and there are 9 million less forms, 135 million hours will be saved. Since most AMT filers have higher income, a higher average compensation of $62.99 was used to calculate the estimated compliance savings. 
 
Tax reform has resulted in significant savings. Not only has tax reform saved Americans money from individual tax cuts, the simplification of the tax code is now saving Americans even more money by reducing time and money spent complying with the tax code.
 

Photo Credit: Brookings Institution


Senators Introduce Legislation to Take Back Congressional Oversight of Section 232 Tariffs

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Posted by Gaby Enos on Monday, August 13th, 2018, 9:28 AM PERMALINK

President Trump campaigned on growing the economy, increasing wealth and prosperity for families, and ensuring America is a competitive place to do business. To date, these promises have been kept through a combination of deregulation and passage of pro-growth, pro-family tax reform.

The economy is flourishing since the passage of the Tax Cuts and Jobs Act with major job growth, low unemployment, and soaring business confidence.

However, the tariffs proposed by the Trump administration threaten to undercut the success of tax reform and have widespread negative economic implications.

Tariffs – or taxes on trade – are economically destructive. They increase the price of products exported into the US, which raises costs for families and businesses that rely on imports. Tariffs also leave US businesses vulnerable to retaliatory tariffs that will make it harder to business overseas.

Many of tariffs – such as the steel and aluminum tariffs and the proposed automobile tariffs – have been initiated through Section 232 of the Trade Expansion Act, which allows the President to impose tariffs based on national security grounds.

Unfortunately, Congress has virtually no oversight over this process, allowing Sec. 232 to become a prime tool for executive overreach.

To ensure guardrails exist around this process, Senators Rob Portman (R-OH), Doug Jones (D-AL), and Joni Ernst (R-IA) introduced the Trade Security Act. This legislation bifurcates the Sec. 232 process by requiring the Department of Defense to justify any national security basis for new tariffs.

In addition, the Trade Security Act expands Congress’ role over the Sec. 232 review process by requiring the administration to consult with lawmakers and expanding the ability of Congress to formally disapprove of Section 232 tariffs.

Although President Trump should be applauded for fighting for more favorable trade deals, the proposed tariffs are negatively impacting American jobs, growth, and wages. In fact, the already enacted tariffs have resulted in an estimated 48,585 lost jobs, with the threatened tariffs potentially costing an additional 277,825 American jobs, according to the Tax Foundation.

Given the economic significance of these tariffs, it is crucial that Congress take back their constitutional authority to regulate trade with foreign nations. The Trade Security Act will help achieve this goal by ensuring Congress has an expanded role over the Section 232 tariff process.

Photo Credit: Associated Press


Trump Administration Restoring Healthcare Freedom Through Expansion of Short-Term Plans

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Posted by Gaby Enos on Wednesday, August 8th, 2018, 1:46 PM PERMALINK

Earlier this month, the Trump administration took another step toward restoring healthcare freedom for Americans across the country.

On August 1, the Departments of Health and Human Services, Labor and Treasury issued a final rule on short term, limited duration health plans, which will allow families and individuals to purchase these plans for 12 months with a total of 36 months of renewability.

These plans are exempt from Obamacare’s costly mandates and regulations and so the new rule has the potential to provide an off ramp for families that have seen higher prices and reduced access under Obamacare.

Once in effect, this will reverse an Obama-era policy that limited short term plans to three months with no option to renew, a decision which deprived millions of Americans access to a more flexible and affordable healthcare option.

More importantly, the Trump administration’s new rule comes at a crucial time when millions of Americans are facing increasing premiums and diminishing options in the individual insurance market. 

Today, over 52 percent of American counties have one Obamacare provider, forcing individuals and families to choose between expensive healthcare plans or nothing.

Those that do have insurance are being priced out due rising premium costs of almost 200 percent for some, especially middle-class families that are often ineligible for subsidies. In 2017, enrollment in the individual market without subsidies dropped by 21 percent, while premiums rose 20 percent.

Limited duration plans are also expected to be 50 to 80 percent cheaper than current Obamacare plans, with some estimating that more than two million Americans who are currently uninsured may choose these plans due to their flexibility and affordability.

There are multiple cases in which short-term, limited duration insurance policies could be important to families. They can provide coverage for those who are in between jobs, transitioning between plans or in between coverage, can be used by middle-class families that do not have access to subsidized Obamacare plans, and can be used by students who are taking time off from school.

While this is a significant step toward enacting patient-centered healthcare, the expansion of short-term limited duration health plans is just one of many steps taken by President Trump to expand access and choice to Americans.

The Trump tax cut repealed the Obamacare individual mandate tax penalty which forced individuals to purchase government approved health insurance or pay a fine totaling almost $700 for an individual and $2,000 for a family. This tax is also highly regressive – of the 6.6 million Americans impacted, over 80 percent made less than $50,000.

The administration has also proposed a sweeping plan to reduce drug prices and promote innovation that would strengthen free market tools that exist in Medicare Part D, create stronger incentives to lower costs, and ensure foreign governments are no longer allowed to freeload off American medical innovation.

Expanding access to short-term, limited duration insurance is yet another example of President Trump delivering on his promise to provide Americans with more access to more affordable and flexible access to healthcare.  

Photo Credit: Health Affairs


IRS Unable to Administer FATCA Despite Seven Years and Spending 380 Million in Taxpayer Dollars

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Posted by Gaby Enos on Tuesday, July 17th, 2018, 1:45 PM PERMALINK

The Foreign Account Tax Compliance Act (FATCA) is so complex and unworkable that 8 years later, the IRS still cannot administer the law. This failure to implement FATCA comes despite spending $380 million in taxpayer dollars on enforcement and implementation according to a report by the Treasury Inspector General for Tax Administration.

FATCA was enacted into law in 2010 to ensure that Americans using off shore bank accounts were not evading taxes; however, this law has done nothing more than increase compliance costs for Americans overseas.

The IRS is required to implement FATCA as outlined in the “FATCA compliance roadmap.” However, as the TIGTA report notes, over half of the 31 actions under the roadmap are in the early stages of development, and another 7 have not even been acted on:

“Of the 31 activities, the IRS indicated that it has taken action on 24 activities. However, for 16 of those 24 activities, we observed that action was either limited or in the early stages of development. In addition, we identified delays of one to two years in implementing 20 of the 24 activities, 10 of which are still experiencing delays from being fully implemented…As a result, the IRS is not taking appropriate enforcement action on FATCA compliance activities or measuring its performance.”

This lack of progress comes despite the IRS spending $222 million on IT costs from 2012 to 2017, with another $157 million being spent on “other costs.”

One of the main FATCA provisions requires foreign financial institutions to file form 8966s, which contain detailed financial information of taxpayers. As of 2017, 2.4 million, or nearly 30 percent of all 8966 forms filed were rejected. One reason for this is that the IRS still does not have the resources necessary to match FFI (foreign financial institution) and individual tax payer data, even after spending $222 million on it, leading to millions of records being rejected due to invalid TIN or missing/inaccurate information.

According to the TIGTA Report, “IRS management acknowledged that they have only taken limited action related to the matched and unmatched records, and noted that they have not taken any compliance action.”

This complicated and unenforceable law impacts any American with an overseas bank account and imposes burdensome reporting requirements on FFIs.

Americans with assets abroad that meet or exceed $50,000 are subject to compliance with FATCA tax filing. FATCA is especially burdensome for expatriate Americans who are forced to comply with tax laws in their country of residence and the IRS.

Americans have also had to deal with being locked out of foreign financial institutions due to a 30 percent withholding penalty that can be imposed on the U.S. assets of any foreign institution that fails to comply. Foreign banks, stockbrokers, hedge funds, and insurance brokers often times find it easier to deny Americans their services, than to have to worry about complying with the costly and complex IRS law. 

Eight years, and 380 million dollars later, FATCA is still as unenforceable and complex as it was when it first became law in 2010. It is time to put an end to this costly and overreaching law once and for all before even more money goes to waste.  

Photo Credit: Associated Press


ATR Supports H.R. 6179, the "Middle Class Savings Act"


Posted by Gaby Enos on Thursday, July 12th, 2018, 5:26 PM PERMALINK

Today, Americans for Tax Reform released a letter in support of H.R. 6179, the "Middle Class Savings Act." Since the passage of the Tax Cuts and Jobs Act, the US has seen drastic economic growth and tax relief for Americans at every income level. This legislation, sponsored by Congressman Andy Barr (Kentucky-06), modernizes the long term capital gains tax brackets to align with the current income tax brackets so that Americans are better able to invest and save. 

You can read the full letter here or below: 

Dear Representative Barr:

I write in support of H.R. 6179, The Middle Class Savings Act, legislation that modernizes and simplifies the capital gains tax.

In the months since the Tax Cuts and Job Acts has been in effect, the US has seen drastic economic growth and tax relief for Americans at every income level.  

The Middle Class Savings Act will build on the success of the TCJA by updating the long-term capital gains tax brackets. When TCJA passed, the long term capital gains tax rates were not lowered to align with the new income tax rates. Instead, the rates from the old tax code were left in place, resulting in higher taxes for Americans. 

A recent report from the Bureau of Economic Analysis stated that the Household Saving rate in the US averaged 3.4 percent in February of 2018, compared to an average of 8.26 percent over the past 60 years. This means that while families have more take-home pay to invest and save, the capital gains tax in its current state is discouraging people from doing so.

The Middle Class Savings Act will make it easier for American families to invest and save, thereby growing the economy. By aligning the long term capital-gains tax rates to the new income tax rates, families will see further tax relief and will be better equipped to save and invest in the US economy

Onward,

Grover G. Norquist
President, Americans for Tax Reform


ATR Supports H.R. 6333, the "Tax Identity Protection Act"


Posted by Gaby Enos on Thursday, July 12th, 2018, 5:12 PM PERMALINK

Today, Americans for Tax Reform released a letter in support  on H.R. 6333, the "Tax Identity and Protection Act." This legislation, sponsored by Congressman Buddy Carter (Georgia-01), will help the IRS improve its ability to recognize fraudulent use of social security numbers and hold them accountable for the protection of tax payer data.

You can read the full text here or below: 

Dear Representative Carter:

I write in support of H.R. 6333, the Tax Identity Protection Act. This legislation will help the IRS improve its ability to recognize fraudulent use of social security numbers. Members of Congress should support this important legislation.

In June 2017, the Inspector General of the Treasury Department found that 1.4 million illegal immigrants may be making fraudulent tax payments through stolen social security numbers.

To address this issue, the Tax Identity Protection Act would require the IRS to submit a report detailing how the agency can better identify illegal immigrants who are using stolen social security numbers to make fraudulent tax payments. 

The IG recommended that the IRS they identify those making fraudulent tax payments and notify this whose social security numbers have been stolen. However, the IRS disregarded this recommendation, claiming that, because of the automated computer system, they are unable to distinguish a fraudulent tax payment from one that was only a mismatched name and social security number.

This is clearly problematic. In many cases, taxpayer data is being stolen and used to make fraudulent tax payments without the individual having any idea that their identity has been stolen. Even worse, the IRS is aware of this and has done nothing to stop it.

By supporting H.R. 6333, lawmakers will be taking an important step towards holding the IRS accountable for the protection of taxpayer data. Members should support and co-sponsor the Tax Identity Protection Act.

Onward,

Grover G. Norquist
President, Americans for Tax Reform


ATR Supports H.R. 6268, the "Preventing Unionization of Revenue Service Employees (PURSE) Act"


Posted by Gaby Enos on Thursday, July 12th, 2018, 4:52 PM PERMALINK

Today, Americans for Tax Reform released a letter in support of H.R. 6268, the "Preventing Unionization of Revenue Service Employees (PURSE) Act." This legislation, sponsored by Congressman Paul Gosar (Arizona-04), will prevent federal government tax collectors from unionizing and entering into collective bargaining agreements at the expense of taxpayers.

The full letter can be viewed here or below: 

Dear Representative Gosar:

I write in support of H.R. 6268, Preventing Unionization of Revenue Service Employees (PURSE) Act. This legislation will ensure that IRS employees and other government bureaucrats do not waste tax payer funds on unionization and possible partisan politics.  

The PURSE Act will prevent federal government tax collectors from unionizing and entering into collective bargaining agreements at the expense of taxpayers. Currently, other federal agencies such as the FBI, GAO and the NSA, are prohibited from unionizing and entering into collective bargaining agreements. There is no reason why the IRS should not be prohibited from doing the same.

Millions of tax payer’s dollars have been wasted by IRS employees who have spent their work days on union activities, rather than their official duties. Further, with over 70,000 union-covered IRS employees, and 95% of union contributions going to Democrat candidates, it is clear that there is a massive infiltration of partisan politics in our supposedly nonpartisan agencies.    

After the momentous Janus decision, it is critical that Representatives continue to move forward and further prevent unions from exerting their partisan agendas on government employees.

The IRS is crucial to the enforcement of our nation’s tax system, as such, it is imperative that they enforce the law with integrity and fairness. Thus, I urge members to support H.R. 6268, in order to ensure that IRS employees remain impartial when administering our tax laws.

Onward, 

Grover G. Norquist
President, Americans for Tax Reform


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