Tom Hebert

Sens. Cassidy and Sinema Release Paid Family Leave Plan That Won't Raise Taxes

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Posted by Tom Hebert on Tuesday, August 6th, 2019, 1:05 PM PERMALINK

Senators Bill Cassidy (R-La.) and Kyrsten Sinema (D-Ariz.) have released a proposal that builds upon the success of the child tax credit (CTC) to help working families all across the United States.

The Cassidy-Sinema proposal gives parents the option of advancing up to $5,000 from the CTC in the event of a birth or adoption of a child. This would allow parents to finance child care, time off from work, or other expenses incurred at the beginning of a child’s life. 

Notably, the Cassidy-Sinema proposal does not raise taxes, endanger Social Security, or put costly mandates on employers to fund the new benefit. Instead, parents that claim the advanced credit receive an adjusted CTC of $1,500 over the next ten years. The $5,000 advance is completely optional, as parents can forgo the benefit if they already receive paid leave from their state or employer. 

This plan builds off the success of the CTC, which is broadly popular amongst middle and low-income families. According to the most recent IRS data available, over 23 million families per year claim the CTC. The most recent reforms to the CTC were in the Republican-passed Tax Cuts and Jobs Act, which doubled the credit from $1,000 to $2,000 and raised the phase-out threshold to $200,000 for single filers and $400,000 for joint filers. The law also made the CTC refundable up to $1,400, meaning that if the credit brings an individual’s tax liability below zero, the IRS will cut a check for $1,400. 

Other plans for paid family leave do not strike the delicate balance of the Cassidy-Sinema proposal. The Family And Medical Insurance Leave (FAMILY) Act, sponsored by Sen. Kirsten Gillibrand (D-N.Y.) and Rep. Rosa DeLauro (D-Conn.), would impose a 0.4 percent payroll tax on employers and employees that would only cover 15 percent of the bill's $226.8 billion cost. Analysis from the American Action Forum shows that a new payroll tax as high as 2.9 percent would have to be implemented to fully fund the plan’s new benefits. The Gillibrand-DeLauro tax hikes would be especially devastating for small businesses that would be forced to cut staff or wages to comply with the new mandate. 

The Cassidy-Sinema plan is a truly bipartisan proposal that builds on the success of an existing program without raising taxes, endangering entitlements, or imposing costly mandates on employers. The plan works within the existing framework to give families an important financial boost during one of the most costly periods of a child’s life.

Photo Credit: Gage Skidmore


Bill de Blasio Calls for $10 Trillion Tax Increase

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Posted by Tom Hebert on Monday, August 5th, 2019, 3:08 PM PERMALINK

New York City Mayor and Democrat presidential candidate Bill de Blasio has released his “Fair Share Tax Plan.” If implemented, de Blasio’s plan would raise taxes on millions of Americans and devastate the U.S. economy. 

Based on estimates provided by the de Blasio campaign, this plan would increase taxes by over $10 trillion over the next decade.

However, it would only cover a portion of the cost of new spending that de Blasio supports.

For instance, the Green New Deal would cost $93 trillion to implement, a tenth of the cost of the revenue raised from the de Blasio’s tax plan.

This tax hike plan would barely dent the $40 trillion price tag to implement the Medicare for All socialized healthcare plan that de Blasio supports.

While de Blasio might pay lip service to the idea of making the rich “pay their fair share,” this plan shows that there is no way to fully pay for far-left spending priorities without hiking taxes on the middle class. 

Dismantling the Trump Tax Cuts 

De Blasio plans to dismantle most of President Trump’s signature legislative achievement, the Tax Cuts and Jobs Act (TCJA). De Blasio would:

  • Raise the current top marginal tax bracket from 37 percent to 60 percent. This would create a total top tax rate of approximately 73 percent for de Blasio’s New York constituents. 
  • Treat capital gains as ordinary income, stifling investment and throttling economic productivity. This capital gains tax hike would make the top capital gains rate  in de Blasio’s NYC 76.5 percent:
    • De Blasio top capital gains tax rate: 60 percent
    • NY/NYC combined top capital gains rate: 12.7 percent
    • Obamacare capital gains tax: 3.8 percent
    • TOTAL: 76.5 percent
  • Subject derivatives to mark to market treatment, which would force a balance sheet to value an asset at its current market price instead of at book value. 
  • Expanding the Alternative Minimum Tax. The TCJA raised the exemption threshold for the AMT to $1 million for families and $500,000 for individuals, which still affects approximately 200,000 families and individuals a year. De Blasio would lower the threshold back to pre-TCJA levels, which would cause approximately 5 million families to resume paying the tax. 
  • Repeal the 20 percent passthrough income deduction mainly used by small businesses. 
     

Taxing American Businesses 

De Blasio would impose a number of tax increases on American businesses, which would harm investment, job creation and the expansion of the economy due to the Trump tax cuts.

De Blasio proposes raising the corporate rate to the pre-TCJA rate of 35 percent, which would give the U.S. an effective 41 percent corporate tax when combined with the average state corporate tax rate of 6 percent. 

The de Blasio corporate tax increase would give the U.S. a much higher rate than the United Kingdom (19 percent), China (25 percent), Canada (26.8 percent), and Ireland (12.5 percent). It would impose a tax rate higher than the current combined corporate rate across the 36 member Organisation for Economic Development and Cooperation (OECD), which is currently 23.7 percent. An increase in the corporate tax rate would directly raise the cost of utility bills in all 50 states.

The de Blasio plan would also: 

  • Restore a “Corporate Alternative Minimum Tax” that would prevent businesses from using lawful deductions and credits upheld by bipartisan majorities in Congress
  • Subject U.S. businesses to double taxation on income earned at home and abroad. Most countries have a territorial tax system, which would put the U.S. at a competitive disadvantage on the world stage. 
  • Impose a 0.2 percent financial transactions tax on stock, bond, and derivative trades. As ATR has written, this type of tax would harm economic growth and fail to raise any significant revenue. 
  • Impose a 0.15 percent tax on banks 

 

Massive New Wealth Tax

De Blasio openly claims that he has the “most aggressive tax on extreme wealth of any candidate in the race.” His proposal: 

  • Imposes a 1 percent tax on households with wealth between $10 million and $25 million
  • Imposes a 2 percent tax on households with wealth between $25 million and $100 million
  • Imposes a 3 percent tax on households with wealth $100 million and above
     

De Blasio would also empower IRS agents to keep a list of all household assets.

This tax would subject Americans to unfair double taxation as Americans already pay taxes on income and capital gains, not to mention the 40 percent death tax on estates.

Contrary to de Blasio’s claim, a wealth tax would also fail to generate any significant revenue. A recent study shows that a wealth tax levied on assets above $11 million would only generate $146 billion in revenue, well short of what de Blasio would need to raise $3 trillion over a decade. 

A wealth tax has also failed everywhere it has been tried. In France, a wealth tax imposed on assets over 1.3 million euros led to taxpayers fleeing the country. In 2016 alone, 12,000 millionaires left France, the highest outflow in the world. Wealth taxes have also been repealed in Sweden, Denmark, The Netherlands, Austria, Finland, Germany, Iceland, Luxembourg, Ireland, and Italy. 

Photo Credit: Kevin Case


List of Tax Hikes in Kamala Harris Healthcare Plan

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Posted by Tom Hebert on Monday, July 29th, 2019, 3:30 PM PERMALINK

Democrat presidential candidate Kamala Harris (D-Calif.) today released her “Medicare for All” healthcare plan. 

This “Kamalacare” proposal will impose a number of devastating tax hikes on the American people:

  • 7.5 percent payroll tax increase on employers, which would slash wages for middle class workers as employers pass the additional costs down to their employees.
  • 4 percent payroll tax increase on households making more than $100,000 per year (this will directly hit 29.2 percent of American households).
  • 70 percent top tax bracket for ordinary income and capital gains income. This would give America the highest income tax rate in the world.  
  • 77 percent Death Tax rate.
  • 1 percent “wealth tax.”
  • 0.2 percent tax on stock trades
  • 0.1 percent tax on bond trades
  • .002 percent tax on derivative transactions
     

Note, Harris uses dishonest terminology to hide the fact that she is raising the payroll tax: she uses the term “premium” instead of “payroll tax.”

There is one minor difference between the Harris and Bernie Sanders “Medicare for All” proposals. While Sanders imposes a new 4 percent payroll tax on Americans making more than $29,000, Harris imposes the tax on Americans making more than $100,000. This tax hike would directly hit the 29.2 percent of households that make over $100,000 a year. 

The definition of middle class seems to be getting smaller and smaller for Democrats. During the fiscal cliff negotiations in 2012, Nancy Pelosi and Chuck Schumer did not want to raise taxes on anyone making less than $1 million a year. Former President Obama defined “middle class” as making less than $250,000 a year. 

To make up the funding gap between her $100,000 threshold and Sanders’s $29,000 threshold, Harris would impose a slew of financial transaction taxes on American businesses. These new taxes includea 0.2 percent tax on stock trades, a 0.1 percent tax on bond trades, and a .002 percent tax on derivative transactions.

These new FTTs would especially impact 401(k)s, pensions, and index funds. Returns on pension funds and other savings would be lower because of the increased costs of buying and selling and the reduction in value of shares. On a macroeconomic level they would increase the cost of capital and reduce productivity, harming jobs and wages all across the country.  

The Harris tax hikes don’t stop there. Harris has repeatedly promised that she will repeal the entire Tax Cuts and Jobs Act. At a recent campaign stop, Harris said she would repeal the TCJA four times in three minutes. If Harris repealed the tax cuts, the following would happen:

  • A family of four earning the median income of $73,000 would see a $2,000 tax increase.
  • A single parent (with one child) making $41,000 would see a $1,300 tax increase.
  • Millions of low and middle income households would be stuck paying the Obamacare individual mandate tax.
  • Utility bills would go up in all 50 states as a direct result of the corporate income tax increase.
  • Small employers will face a tax increase due to the repeal of the 20% deduction for small business income.
  • The USA would have the highest corporate income tax rate in the developed world.
  • Taxes would rise in every state and every congressional district.
  • The Death Tax would ensnare more families and businesses.
  • The AMT would snap back to hit millions of households.
  • Millions of households would see their child tax credit cut in half.
  • Millions of households would see their standard deduction cut in half, adding to their tax complexity as they are forced to itemize their deductions and deal with the shoebox full of receipts on top of the refrigerator.
     

In sum, Harris would increase taxes on millions of Americans, cause millions of Americans to lose their current healthcare plans, and harm economic growth. This plan is an unserious attempt to pander to the Democrat party’s far-left base. 

 

Photo Credit: Gage Skidmore


ATR Supports Pro-Consumer Contact Lens Rule Changes

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Posted by Tom Hebert on Friday, July 26th, 2019, 10:25 AM PERMALINK

ATR has sent the following letter in support of proposed changes to the Contact Lens Rule, 16 CFR Part 315, Project No. R511995:

On behalf of Americans for Tax Reform, I write in support of new changes to the Contact Lens Rule (16 CFR Part 315 Project. No R511995). These changes strike the correct balance between promoting the free market and protecting important consumer rights. 

In 2003, President George W. Bush signed the Fairness to Contact Lens Consumers Act (FCLCA) into law. The legislation required that optometrists provide patients with a copy of their prescription.

This requirement ensured consumers have the freedom to purchase lenses from wherever they choose without interference. 

Prior to passage of FCLCA, optometrists could make it more difficult for their patients to purchase from a third party. These concerns were far from hypothetical – there were many well documented cases of bad actors implicitly or directly blocking the free choice of consumers.

To be clear, there should be no restrictions on professionals selling contact lens, nor should there be any restriction on consumers safely purchasing from a third party. 

Since the rule has been enacted, patients have had more options on where to fill their prescriptions. FCLCA fixed existing flaws in law by allowing consumers the right to “passive verification” over contact lens prescriptions, a change that meant patients would have access to a written prescription, so they could shop where they wanted.

The newly proposed changes to the contact lenses rule would protect FCLCA successes and further strengthen federal law. 

The rule changes maintain that prescribers are required to have patients affirmatively acknowledge in writing that they have received a copy of their prescription. The acknowledgements must be kept on file for three years. The FTC is giving optometrists four different options for patients to acknowledge prescription receipt, including printing the acknowledgement on the receipt where they pay for their exam.  

While requiring a written acknowledgment of prescription receipt might place a minimal recordkeeping burden on optometrists, other methods of ensuring patients receive a copy of their prescription have proven ineffective. In California, many optometrists have ignored a state law requiring them to hang signs detailing patient rights as enumerated in the FCLCA.  

Consumers will also have the ability to receive prescriptions in digital form. While this should not replace paper prescriptions entirely, especially for older patients, digital prescriptions give patients flexibility to shop around with third-party sellers. 

Taken together, the new proposal will add to the success of existing law, promoting the well-being of patients and the free market. I urge the FTC to move forward with this rule and continue to reject any proposals that weaken contact lens consumer protections. 

Onward,
Grover G. Norquist
President, Americans for Tax Reform

Photo Credit: Andy Simmons


Conservative Lawmakers Should Reject New Budget Deal

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Posted by Tom Hebert on Tuesday, July 23rd, 2019, 3:28 PM PERMALINK

Congress is set to vote on a spending deal that will bust discretionary spending caps and raise the debt ceiling through 2021. This package busts the discretionary caps by $320 billion over the next two years and contains less than $80 billion in budget offsets. 

Conservative lawmakers should reject this budget deal. 

This package breaks spending caps as outlined 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.

Since the BCA was enacted, Congress has passed three Bipartisan Budget Acts that broke the BCA caps by a combined $440 billion over 6 years. The first two deals broke the caps by a combined $144 billion. The third deal, which Congress passed in 2018, broke the caps by $296 billion over 2018 and 2019. That deal was only offset by approximately 13 percent. 

This year’s spending package rapidly accelerates the growth of federal spending by breaking the discretionary caps by $320 billion over the next two years with less than $80 billion in offsets. With a national debt of $22 trillion and climbing, this runaway spending is simply unsustainable. 

Conservatives have led the fight for fiscal responsibility throughout these budget negotiations. The Republican Study Committee (RSC), the House's largest caucus of conservative lawmakers, sent a letter to Congressional leadership outlining the need for fiscal restraint in this budget deal. Unfortunately, it appears that none of their recommendations have been included in the final deal. 

The legislation being taken up this week 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

If Democrats (and some Republicans) were serious about fiscal responsibility, they would go back to the drawing board and produce a budget resolution through regular order that abides by the BCA spending caps.

Photo Credit: Ken Teegardin


Steny Hoyer in 1992: Indexing Capital Gains “Benefits Small Business”

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Posted by Tom Hebert on Monday, July 8th, 2019, 11:04 AM PERMALINK

In 1992, current House Majority Leader Steny Hoyer (D-Md.) spoke in favor of indexing capital gains to inflation. 

Hoyer said: “The capital gains provisions in H.R. 4287 benefit small business by indexing newly purchased assets. Income gauged would be much more reliable so that, real not inflationary gains will be taxed, and taxed at the same 28 percent maximum rate on gains.”

Other Democrats like Chuck Schumer lined up on the House floor to praise H.Amdt. 438, an amendment to the H.R. 4210, the Tax Fairness and Economic Growth Act of 1992. The amendment would have ended the inflation tax on capital gains. 

Ultimately, 220 House Democrats voted to end the tax on inflation, including Hoyer, Schumer, Nancy Pelosi, and Bernie Sanders. Read Democrat remarks in support of indexing capital gains to inflation here

As President Trump prepares to index capital gains taxes to inflation, ATR expects strong support from the Democrat party based on their previous statements and votes. 

See also: 

Schumer Video: "I Would be for Indexing All Capital Gains"

The tax law Chuck Schumer hates - but used to praise
The Case for Ending the Inflation Tax on Capital Gains
Indexing Capital Gains Taxes to Inflation Resources

Photo Credit: Center for American Progress


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


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