Tom Hebert

Trump Economy Adds 224K Jobs in June

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Posted by Tom Hebert on Friday, July 5th, 2019, 11:00 AM PERMALINK

The Trump economy added 224,000 jobs in June, shattering market expectations and defying Democrats who said that tax reform and regulatory relief would not grow the economy. The U.S. economy has added approximately 6 million jobs since President Trump took office. 

The Bureau of Labor Statistics Report shows that the unemployment rate held steady at 3.7 percent, a 50-year low. The unemployment rates for key demographics like women, African-Americans, and Hispanics remained near historic lows. 

The labor force participation rate also held steady at 62.9 percent. This is a stark contrast to the 40-year lows the labor force participation rate hit under the Obama Administration.

Professional and business services led the growth with 51,000 jobs added in June. The healthcare industry added 35,000 jobs, and transportation and warehousing added 24,000 jobs in June. Construction employment also continued to trend up in June, with 21,000 jobs added. 

Nominal wage growth also trended upwards at 0.2 percent. Over the past 12 months, wages have been up an average of 3.1 percent. 

This strong jobs report shows that the Tax Cuts and Jobs Act is working for American workers. 

GDP grew by 3.2 percent in the first quarter of 2019 and has averaged 3 percent quarter-to-quarter growth since the Tax Cuts and Jobs Act was passed into law.

Businesses have responded to the tax cuts by giving employees higher wages and creating new employee benefit programs, while utility companies are passing tax savings onto consumers in the form of lower rates.

Families are also seeing direct tax reduction – a family of four with annual income of $73,000 (median family income) will see a tax cut of more than $2,058, a 58 percent reduction in federal taxes. In net, households are paying an average of 24.9 percent in lower taxes according to a report released by H&R Block based on their clients’ tax returns. 

In order to continue this strong economic growth, Congress should also ratify the United States-Mexico-Canada Trade Agreement (USMCA). The agreement updates NAFTA to include new automotive rules, new protections for intellectual property rights, and modernizes agricultural trade to benefit American workers. A recent report indicates that the USMCA would raise U.S. real GDP by $68.2 billion and create approximately 176,000 American jobs.

Tax cuts and deregulation have made America open for business again. It is time for Congress to finish the job by ratifying USMCA.

Photo Credit: Gage Skidmore


House Dems Suing Treasury Department for Trump Tax Returns

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Posted by Tom Hebert on Tuesday, July 2nd, 2019, 3:30 PM PERMALINK

House Democrats just sued the Treasury Department in a last-ditch effort to force the IRS to release President Trump’s tax returns.

Ways and Means Committee Chairman Richard Neal (D-Mass.) filed the lawsuit in federal court Tuesday to enforce his previous subpoena against Treasury Secretary Steve Mnuchin and IRS Commissioner Chuck Rettig.  

In the lawsuit, House Democrats argue that they do not need a legitimate legislative purpose to force the release of any individual’s tax returns. This new argument flies in the face of previous Democrat claims that a legitimate legislative purpose exists for exposing Trump’s tax returns. 

The left’s obsession with releasing the president’s tax returns is unprecedented. Historically, Congress has sought taxpayer information to assist in drafting tax legislation. 

In this case, Democrats are clearly seeking the president’s tax returns in an attempt to embarrass a political opponent. Petty partisanship is the left’s only motivation here.

Ever since they lost the 2016 election, Democrats have been frothing at the mouth to expose the President’s tax returns. During the 2018 midterm elections, House Speaker Nancy Pelosi (D-Calif.) bragged that exposing the President’s tax returns “is one of the first things [the Democrat House would] do — that’s the easiest thing in the world. That’s nothing.”

Millions of Americans trust the IRS to handle their sensitive financial information discreetly and legitimately. 

Forcing the IRS to release the president’s tax returns would be a grave violation of the public trust, and could open up every American’s data to the whims of the left’s political vendettas. 

The sad truth is that Democrats are willing to weaponize the IRS just to release the president’s tax returns. 

It is time for all Americans to stand up and defend this president from the left’s unprecedented and unconstitutional demands. Join ATR in stopping the Democrats’ overreach in trying to get access to President Trump’s tax return by clicking HERE

Photo Credit: AFGE - Flickr


House Democrats Vote Against Middle Class Tax Cuts

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Posted by Tom Hebert on Friday, June 21st, 2019, 4:15 PM PERMALINK

House Democrats voted against several Republican proposals to permanently cut taxes for the middle class.

The Democrat-controlled House Ways and Means Committee debated four pieces of legislation this week with very little public notice. Republicans offered numerous pro middle-class amendments, but Democrats shot down every proposal.

Republicans offered amendments to make the Tax Cuts and Jobs Act’s middle-class tax cuts permanent. If adopted, these amendments would have meant a permanent: 

  • Doubled standard deduction: this expansion resulted in dramatic tax reduction for the 105,055,150 million taxpayers that took it before the passage of tax reform, a number that has only increased since the TCJA became law.
  • Doubled child-tax credit: this expansion benefited over 22 million American middle-class families that claim the child tax credit.
  • Individual rate cuts: a family of four earning the median income of $73,000 is seeing a federal tax cut of $2,000, while overall tax liability has dropped by almost 25 percent, according to a report from H&R Block.
     

All of these provisions have helped middle-class Americans, and Democrats were unanimous in opposing them.

Democrats also unanimously opposed repealing the Medical Device Tax, an Obamacare holdover that devastated the American healthcare system while it was in effect. The medical device tax was in effect from 2013 and 2015 but Congress has suspended the tax since 2016. When it was in effect, research indicates that the tax reduced research and development by $34 million in 2013 and disproportionately harmed companies with lower profit margins. This resulted in a loss of approximately 28,000 jobs.

Finally, Democrats unanimously voted against cutting taxes for Americans with high medical bills. Before Obamacare, families facing high medical bills could deduct expenses that exceeded 7.5 percent of their AGI. According to the IRS, approximately 10 million families took advantage of this deduction each year before Obamacare was signed into law. In 2010, the average taxpayer claiming the deduction earned just over $53,000 annually.

Obamacare increased the threshold to claim the medical expense deduction to 10 percent of AGI. The TCJA restored the pre-Obamacare 7.5 percent threshold, but House Democrats opted not to make that increased threshold permanent.

Every time Democrats had the opportunity to extend or make middle-class tax cuts permanent, they refused. The next time Democrats tell you that they are for cutting taxes for the middle class, remember this week’s votes.

Photo Credit: Gage Skidmore


House Democrats Want to Weaponize the IRS

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Posted by Tom Hebert on Thursday, June 13th, 2019, 3:00 PM PERMALINK

House Democrats have been obsessed with forcing President Trump to release his tax returns ever since they regained control of the House of Representatives.

Recently, Ways and Means Chairman Richard Neal (D-Mass.) subpoenaed Treasury Secretary Steve Mnuchin and IRS Commissioner Chuck Rettig to force them to turn over the President’s tax returns. In a win for the rule of law, the Trump Administration has refused to comply with the left’s outrageous and constitutionally questionable demands.

The left’s repeated demands to force the release of the president’s tax returns is unprecedented. In the vast majority of cases, Congress seeks taxpayer information to assist in drafting tax legislation. The Supreme Court has ruled that legislators can only demand private tax information when they are pursuing a “legitimate task of the Congress.”

House Democrats assert that their request is based on a legitimate legislative purpose. If you believe that, you’ve been living under a rock for the past two years. 

Ever since they lost the 2016 election, Democrats have been frothing at the mouth to expose the President’s tax returns. During the 2018 midterm elections, House Speaker Nancy Pelosi (D-Calif.) bragged that exposing the President’s tax returns “is one of the first things [the Democrat House would] do — that’s the easiest thing in the world. That’s nothing.”

In this case, Democrats are clearly seeking to expose the president’s tax returns just for the sake of exposure. Petty partisanship is the left’s only motivation here. 

If Democrats are successful in exposing the president’s returns, they would turn the IRS into a political organization. Millions of Americans trust the IRS to handle their sensitive financial information discreetly and legitimately. Forcing the IRS to release the president’s tax returns would be a grave violation of the public trust, and could open up every American’s data to the whims of the left’s political vendettas. 

It is time for all Americans to stand up and defend this president from the left’s unprecedented and unconstitutional demands. Click here to join ATR in stopping the Democrats’ overreach in trying to expose President Trump’s tax returns.

See also: The Rise of IRS Injunction Suits Threatens Taxpayer Rights 

Photo Credit: Flickr


ATR Supports Sen. Toomey's "Bicameral Congressional Trade Authority Act"

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Posted by Tom Hebert on Thursday, June 13th, 2019, 11:35 AM PERMALINK

Americans for Tax Reform President Grover Norquist has released a letter in support of S. 287, the “Bicameral Congressional Trade Authority Act of 2019.” This legislation, sponsored by Senator Pat Toomey (R - Pa.), restores important trade responsibilities to Congress.

In contrast to the careful checks and balances outlined in the Constitution, Congress has ceded its trade authority to the executive branch in recent decades. To remedy this, S. 287 addresses and updates Section 232 of the Trade Expansion Act of 1962, legislation that allows the president to take trade action in the interest of national security.

Among other reforms, this legislation gives Congress 60 days to approve Section 232 trade actions, and narrows the Section 232 justification to its original national security intent. The reforms contained in S. 287 will give Congress input on executive branch trade actions as the Framers intended. Congress should pass this legislation, and President Trump should sign it into law. 

You can read the letter here or below:

Dear Senator Toomey:

I write in support of S. 287, the Bicameral Congressional Trade Authority Act of 2019. This legislation restores important trade responsibilities to Congress, giving the legislative branch vital input on trade actions taken by the executive branch.

The Framers designed our constitutional system with careful checks and balances in mind. Article I, Section 8 of the U.S. Constitution gives Congress the express authority to “regulate commerce with foreign nations.” Historically, Congress has carefully deliberated and executed trade policy. Unfortunately, over the past several decades, Congress has ceded its trade authority to the executive branch.

To remedy this, S. 287 addresses and updates Section 232 of the Trade Expansion Act of 1962, a provision that allows the executive branch to levy tariffs on imports that “threaten to impair” U.S. national security. Under Section 232, the President can formally levy tariffs or other trade actions after the Department of Commerce conducts an investigation, with non-binding input from the Secretary of Defense. 

The current administration has used the Section 232 statute to levy 25 percent tariffs on imported steel and 10 percent tariffs on imported aluminum. These sweeping tariffs have had a ripple effect on the world stage. While President Trump is right to target bad actors and renegotiate trade deals to benefit Americans, the impacts of steel and aluminum tariffs demonstrate that Congress should have input on the executive branch’s trade actions.

S. 287 protects the original intent of Section 232 by including several important reforms that vest trade power back in the hands of Congress. Specifically, the bill: 

  • Gives Congress 60 days to approve any Section 232 actions. If Congress does not pass an approval resolution in the 60-day window, the President’s proposed trade actions do not go into effect.
  • Narrows the Section 232 justification to its original national security intent. The Department of Commerce uses an overly broad definition of national security in determining whether or not the President is justified in using his Section 232 authority. This legislation restricts the national security justification to imports with applications in energy resources, military equipment, or critical infrastructure.
  • Transfers the investigative authority from the Department of Commerce to the Secretary of Defense. This ensures that a rigorous national security justification is met. Commerce can offer input about trade action severity after the Secretary of Defense renders a judgment.
  • Imposes retroactivity on Section 232 steel and aluminum tariffs. If Congress does not pass an approval resolution for existing Section 232 tariffs in 45 days, any tariffs and quotas within the past 4 years are repealed.
  • Requires the International Trade Commission (ITC) to conduct reports on the economic impact of Section 232 tariffs, as well as implement an exclusion process for Section 232 tariffs.

The reforms contained in your important legislation will give Congress input on executive branch trade action as the Framer intended. Congress should pass this legislation, and President Trump should sign it into law. 

Onward, 

Grover Norquist
President, Americans for Tax Reform  

Photo Credit: Gage Skidmore


ATR Opposes Legislation That Busts Spending Caps

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Posted by Tom Hebert on Wednesday, June 12th, 2019, 10:00 AM PERMALINK

The House of Representatives is set to vote on a H.R. 2740, a nearly $1 trillion spending bill that will increase government spending to fund the left’s partisan policies.

This “minibus” legislation appropriates approximately $986 billion in discretionary funding. Not only does this bill fail to address deficit reduction, it appropriates $35 billion over the enacted level for FY 2019.

Congress should reject H.R. 2740 and any other legislation that fails to uphold the BCA spending caps.

Compared to current spending levels, the minibus provides twice as much additional funding in FY 2020 for non-defense programs than for defense, and underfunds the Department of Defense by $8 billion. In addition, this legislation spends $52 billion over what President Trump requested in his budget.

This legislation follows the failure of the Democrat-controlled House Budget Committee to do its job and release a budget resolution. Instead, Democrats passed a $1.3 trillion “deeming resolution” in April, violating budget caps laid out in the Budget Control Act of 2011 (BCA). The BCA contained an enforcement mechanism that capped discretionary spending in the event an agreement on $1.2 trillion in deficit reduction could not be reached. 

Discretionary spending accounts for 30 percent of total federal spending, and Congress appropriates funding for these programs on an annual basis. The other 70 percent of the federal spending is automatically funded, and comprises programs like Medicare and Social Security. If lawmakers are serious about reducing federal spending in the short term, holding the line on discretionary spending caps is the only option.

Unfortunately, members of Congress from both parties have routinely disregarded the BCA spending caps. In 2018, Congress passed H.R. 1892, the “Bipartisan Budget Act.” The bill broke the BCA spending caps by $296 billion over 2018 and 2019. 

The legislation being taken up today will only worsen the failure to constrain spending. Instead of working to constrain spending and pass a fiscally responsible budget, Democrats have been trying to raise their own pay.

Between failing to offer a budget resolution and forcing a vote on this minibus train wreck, Democrats have shown themselves to be totally incapable of governance. If Democrats were serious about fiscal responsibility, they would produce a budget resolution through regular order that abide by the BCA spending caps.  

Photo Credit: Gage Skidmore


Senate Should Restore 529 Expansion As It Considers SECURE Act

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Posted by Tom Hebert on Tuesday, June 11th, 2019, 2:03 PM PERMALINK

Middle class families all across the country use 529 education savings plans to invest in their children’s futures.

These tax-advantaged 529s are tax advantaged savings accounts that allow parents to save and invest after-tax income for education costs. Any money earned through 529 investment is tax-free, making these plans a popular choice for parents looking to save for future education expenses. 

529s are getting more popular as time goes on. In 2018, total investment in 529 plans reached an all-time high of $328.9 billion, and the number of total accounts rose to 13.6 million. As of mid-2018, the average account side is up to $24,153, another record high.  

In 2017, the Republican-passed Tax Cuts and Jobs Act legislation included an amendment from Senator Ted Cruz (R-Texas) that expanded 529 savings accounts to cover K-12 expenses and religious school tuition. This expansion provided real relief for millions of American families and was big win for freedom in education.

Now, Congress has an opportunity to expand 529s even further. Sen. Cruz and Rep. Jason Smith (R-Mo.) recently introduced the Student Empowerment Act. For the first time ever, 529s could be used to cover homeschool expenses, student loan expenses, books, tutoring, testing fees, and educational assistance for students with disabilities. 

Crucially, the legislation expands 529s to cover apprenticeship expenses as well. This expansion would help alleviate the skilled worker shortage in our country by allowing 529 funds to be spent on apprenticeship costs. As with a traditional college, there are many ancillary expenses associated with apprenticeship programs. This bill levels the playing field between students and apprentices by allowing apprentices to use 529 funds to cover these costs.

All of these reforms were initially included in the SECURE Act, retirement savings legislation sponsored by Ways and Means Chairman Richard Neal (R-Mass.). Despite the legislation passing unanimously in the House Ways and Means Committee and having bipartisan support, Speaker Nancy Pelosi (D-Calif.) and Democrat leadership unilaterally removed key 529 provisions from the final bill. According to media reports, Democrat leadership caved to pressure from teachers unions and a “small handful” of radical leftists that oppose homeschooling.

Expanding 529s to include funding options for K-12 and religious school tuition was a big win for American families. Now, Congress has another shot to bring similar relief to even more families. Democrats should stand with American families, not a small minority of special interests, and ensure that 529s are strengthened.

Photo Credit: Flickr - KidTruant


The Rise of IRS Injunction Suits Threatens Taxpayer Rights

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Posted by Alex Hendrie, Tom Hebert on Monday, June 10th, 2019, 9:34 AM PERMALINK

The Internal Revenue Service (IRS) has a history of harassing law-abiding taxpayers. Congress sought to address this through legislation in 1998, but problems have persisted.

More recently, the IRS, working with the Department of Justice, has increasingly turned to “injunction actions,” as a tool to go after taxpayers as noted in a recent report by Tax Notes.

The IRS has authority to launch an injunction action against a taxpayer under U.S. Code Section 7402(a). They are typically launched under one of two circumstances: cases involving tax preparers and cases involving suspected tax shelters. In recent years, the IRS has also used Section 7402 to seek disgorgement against taxpayers, which requires the defendant to turn over all money that they have made in conduct associated with the injunction claim.

Instances of disgorgement (and of Section 7402 in general) have skyrocketed in recent years – since 2015 there have been over 40 cases involving disgorgement, while there were just five between 1954 and 2014.

The agency’s increasingly aggressive use of Section 7402 lawsuits violates the pro-taxpayer reforms passed two decades ago. Section 7402 was little used until passage of the IRS Restructuring and Reform Act of 1998 (RRA), a landmark law which created important protections for taxpayers.

RRA was enacted with several pro-taxpayer provisions and curbed the IRS’ enforcement authority, created the Treasury Inspector General for Tax Administration, an independent watchdog office, and codified the Taxpayer Bill of Rights, a document that the IRS must send every taxpayer who faces an enforcement action.

The Taxpayer Bill of Rights guarantees a basic level of service to American taxpayers. For instance, taxpayers are guaranteed the right to be informed, the right to privacy, the right to challenge the IRS, and the right to not pay more money in taxes than you owe.

Section 7402 injunction lawsuits effectively allow the agency to disregard many of these rights. For instance, these lawsuits are searchable on the Justice Department’s website, subjecting taxpayers to public shaming and damaging their reputation   

The IRS has used its broad authority to file injunction suits in complex cases where it is unclear whether taxpayers are at fault. This was the case in United States v. Zak, where the government filed a complaint asking the court to block six defendants from promoting use of the conservation easement deduction. Without alleging any specific facts, the agency made a blanket claim that defendants impermissibly inflated the value of the deduction by overstating the value of donated easements. The government also seeks to confiscate via disgorgement any income the defendants made from facilitating conservation easement donations.  

To be clear, Section 7402 has legitimate uses. For instance, injunctions have been used against tax preparers that have committed clear fraud by claiming false deductions for unwitting taxpayers in an attempt to defraud the Treasury. However, its use should be limited in scope.

Alarmingly, the IRS has been using Section 7402 as an end run around enshrined taxpayer protections and using this provision to subject taxpayers to extensive litigation. Given the increasing use of this provision, it may be necessary for Congress to step in and reaffirm the congressional intent of RRA by updating the law to stop IRS abuse over taxpayers. 

Photo Credit: Martin Haesemeyer


Norquist: Mexico Tariffs Are Taxes on Americans


Posted by Tom Hebert on Friday, May 31st, 2019, 3:20 PM PERMALINK

The Trump administration has announced its intention to impose new tariffs against Mexico starting at 5 percent on June 10th and gradually rising to 25 percent by October 1st. 

These new tariffs will undermine the progress made toward passage of the United States-Mexico-Canada Trade Agreement (USMCA) and undercut the recent positive news that Section 232 steel and aluminum tariffs on Mexico and Canada were being lifted. 

These new tariffs will increase the price of top imports from Mexico, including cars, TVs, cell phones, medical instruments, and fresh produce. 

On CNBC’s Squawk on the Street this morning, Americans for Tax Reform President Grover Norquist told host Rick Santelli that the new tariffs are harmful to American consumers:

“Tariffs are taxes,” Norquist said. “They are taxes on American consumers and American producers who use imported products. We need to get those tariffs down as quickly as we can. I understand the President's using tariffs to try and get other countries to be more free trade. The sooner we can come to an agreement, the more certainty we have. And we can get those taxes off the American consumer.”

Trade is vital for America’s economy and employment – with more than 20 percent, or 41 million jobs in the U.S. directly tied to trade.  

While Trump is right to fight for secure borders, these new tariffs risk undercutting all the good his administration has achieved for the economy thus far, such as the Tax Cuts and Jobs Act.

These new tariffs also threaten to undermine passage of the USMCA, which updates NAFTA to include new automotive rules, new protections for intellectual property rights, and modernizing agricultural trade to benefit American farmers. A recent report shows that the USMCA would raise U.S. real GDP by $68.2 billion and create approximately 176,000 jobs. As Mexico moves toward ratification of the agreement, these new tariffs could torpedo the Trump trade deal.

If the Administration follows through on its threat to impose new tariffs, it would wipe out future economic growth and obliterate a generational chance for an updated NAFTA agreement. 


Sasse Wins Fight to Permanently Ban Earmarks

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Posted by Tom Hebert on Friday, May 24th, 2019, 2:05 PM PERMALINK

In a huge victory for American taxpayers, the Senate Republican conference Thursday adopted Senator Ben Sasse’s (R-Neb.) amendment to permanently ban earmarks in the 116th Congress and beyond. 

“Earmarks are the ‘broken windows’ of government overspending, the currency of Congressional corruption, and the price of bad votes for more spending,” said ATR President Grover Norquist. “Earmarks are used to buy the votes of congressmen who would never vote for the overall package standing alone, without a bribe.”

ATR has had a longstanding opposition to earmarks and pork barrel spending. Put simply, earmarks are spending programs that members of Congress hide in appropriation or authorization bills to “bring home the bacon” for their districts. This kind of frivolous spending is disrespectful to the taxpayers and a flagrant violation of Congressional duty to be careful stewards of public funds.

“It’s pretty simple: Earmarks are a crummy way to govern and they have no business in Congress,” said Sasse. “Backroom deals, kickbacks, and earmarks feed a culture of constant incumbency and that’s poisonous to healthy self-government.” 

Congress banned earmarks in 2011, but the moratorium expired at the beginning of the 116th Congress in January. Sasse’s amendment bans earmarks for all future Congresses. Without Sasse’s amendment, earmarks would have returned.

 

Photo Credit: Gage Skidmore


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