Tom Hebert

New Jersey Resuscitates Obamacare Mandate Tax

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Posted by Tom Hebert on Thursday, May 31st, 2018, 12:45 PM PERMALINK

78% of New Jersey households hit by the tax make less than $50,000 per year

The Republican tax cuts signed by President Trump repealed the Obamacare individual mandate tax nationwide, but New Jersey residents will be stuck paying it due to the state’s Democrat legislature and governor. Governor Phil Murphy on Wednesday signed the new tax into law that will impose the tax on residents who choose not to purchase “qualifying” health insurance as defined by Obama-era regulations.

New Jersey’s Obamacare tax will disproportionately hit low and middle income New Jersey taxpayers:

-78% of New Jersey households hit by the Obamacare mandate tax make less than $50,000 per year. According to the IRS, the Obamacare mandate tax hit 188,570 New Jersey families and individuals in the most recent year of available data. 146,910 of these taxpayers made less than $50,000 per year – 78 percent of those impacted by the mandate.

-38% of New Jersey households hit by the Obamacare mandate tax make less than $25,000 per year. That’s 70,830 New Jersey households.

-New Jersey households paid a total of $93,342,000 in Obamacare individual mandate taxes in the most recent year of available data.

The new tax, just like the old one, forces New Jerseyans to purchase health care whether they want it or not. The original Obamacare tax required a family of four to pay 2.5 percent of their income or $2,085 – whichever was higher. The tax required an individual to pay $695 or 2.5 percent of his income – whichever was higher.

On a federal level, the results are also grim. 79 percent of households that got hit with the Obamacare individual mandate tax in 2015 made less than $50,000 a year. 37 percent of households made less than $25,000 a year. In total, 6,665,480 households paid $3,079,255,000 in individual mandate tax penalties in 2015.

Photo Credit: TravelingMan


Trump Tax Cuts Boosting Housing Market

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Posted by Tom Hebert on Thursday, May 31st, 2018, 11:00 AM PERMALINK

Several months after President Trump signed the landmark Tax Cuts and Jobs Act (TCJA) into law, the economy is finally booming again. The nonpartisan Congressional Budget Office (CBO) projects GDP growth to be 3.3% by the end of 2018, proving that the Trump tax cuts have been a catalyst to rapid economic growth. This new growth is a welcome relief from 8 years of anemic economic stagnation under the Obama presidency. 

The revitalized economy is a rising tide that lifts all boats. The tax cuts have been a boon to the housing market in several important ways.

First,  the TCJA will inject at least $40 billion into the housing market in 2018 according to a recent report from Zillow. The report estimates that Americans will invest a collective $13.2 billion directly in the housing market by buying or renting larger homes. The report also states that Americans will use a collective $24.7 billion of their tax savings to renovate their existing homes.

Second, home prices are also growing at the fastest pace since 2006, and the median U.S. home value is up over 8.7% in the past year. This is great news for homeowners looking for a return on their investment when selling their homes.

Third, the GOP tax cuts have also incentivized Americans to buy homes. A record 7.8% of respondents to the Conference Board’s consumer confidence survey reported that they plan to buy a home within the next six months.

Fourth, homeownership is on the rise. After hitting an all-time high in 2017, homeownership is projected to increase from 73.9 million homeowners in 2017 to 74.6 million in 2018. In 2026, homeownership is expected to increase to 78.7 million.

Finally, Data from Bloomberg shows that home values are even rising in high-tax states like New York and California. Home values in the Hamptons rose 20% compared to a year ago, and home values in parts of San Francisco and California rose 25% compared to a year ago. Even the disastrous tax-and-spend liberalism plaguing much of the country can’t stop the booming housing market.

The facts are clear: Americans all across the country are benefiting from the Trump tax cuts. Individual provisions in the Tax Cuts and Jobs Act (TCJA) have put more money in the pockets of hard-working Americans. Over 90% of Americans have received a tax cut under the new tax code. Between 2018 and 2025, American individuals and families will see a $1.17 trillion tax reduction as a result of the bill. A family of four earning $73,000 will see over $2,000 in tax cuts, a tax reduction of 58%  A single parent with one child earning $41,000 per year will see $1,304 in tax cuts, a tax reduction of 73 percent.

All of this has rejuvenated the economy. Under President Trump, the unemployment rate is at a 17 year low of 3.9%. The economy has added 800,000 jobs since Trump signed the GOP tax cuts into law, and the IMD World Competitiveness Center just named the U.S. the most competitive economy in the world. Hundreds of companies have announced pay increases, increased employee benefits, or bonuses since December.

The Trump tax cuts have made the housing market great again. Capital investments, home prices, home values, and homeownership are all on the rise. American families and individuals are using their tax savings to buy larger homes or renovate their existing homes. The strong housing market is yet another example of how tax reform has revitalized the economy.  

Photo Credit: Gage Skidmore


The JOBS For Success Act Promotes Upward Mobility and Long-Term Work

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Posted by Alex Hendrie, Tom Hebert on Wednesday, May 23rd, 2018, 2:55 PM PERMALINK

Under President Trump, the economy is roaring.

In the wake of tax reform, the economy has grown at 2.9 percent annual growth in the past year, while the unemployment rate is at a 3.9 percent - the lowest level since 2000. Real disposable income rose 3.4 percent in the first quarter of 2018, and nearly 800,000 jobs have been created since tax reform passed in December.

However, job openings have hit a record high of 6.6 million and labor force participation remains low, indicating that more needs to be done to promote upward mobility and ensure that Americans have long-term employment.

Congress can take an active role in narrowing this jobs gap by reforming the Temporary Assistance for Needy Families (TANF) program.

H.R. 5861, the JOBS for Success Act, introduced by Ways and Means Chairman Kevin Brady (R-Texas) and Human Resources Subcommittee Chairman Adrian Smith (R-NE) reforms TANF to encourage and equip able-bodied adults with the tools they need to find long term work, while simultaneously protecting the vulnerable in our society.

In addition, these reforms will ensure states will spend resources more effectively.

As noted in a study by the Center on Budget and Policy Priorities, states frequently do not spend funds on one of three core welfare programs (basic assistance, child care, and work programs). For instance, Michigan spends $100 million a year on college aid, much of which goes to families earning more than $100,000 per year, while Arizona spends half of its TANF funds on child welfare, rather than helping individuals return to work.

H.R. 5861 implements numerous reforms to strengthen the TANF program:

  • The JOBS for Success Act ensures everyone eligible to find work can get work. Millions of men have left the workforces, so the Jobs program realigns TANF’s focus from single women (as the 1996 reform prioritized) to both men and women.
  • The JOBS for Success Act holds states accountable. Currently, TANF measures the success of the program by the number of participants. The JOBS for Success Act realigns this incentive by making states accountable for tangible work outcomes, while giving them more flexibility to allocate funds where they are most appropriate. The bill also requires states to universally engage with struggling Americans to ensure that they get and keep a job.
  • The JOBS for Success Act ensures that funds are going to those who need it most. The bill prioritizes funds to those under 200% of the poverty line to ensure that taxpayer dollars go to those who need it most. These funds will be used to support job training and child care services for those reentering the workforce.
  • The JOBS for Success Act promotes innovation, transparency, and program coordination by allowing up to 50% of a state’s allocation to be transferred to the Child Care and Development Fund, child welfare (up to 10%), and workforce programs under the Workforce Innovation and Opportunity Act.

The legislation also recognizes that more government is not the answer and wisely does not increase spending over what the government is currently spending.

Since President Lyndon Johnson’s Great Society plan was enacted, the federal government has spent trillions of dollars on welfare programs with few tangible results.

The poverty rate in 2014 (14.8 percent) is actually worse than it was in 1966 (14.7 percent) before the vaunted Great Society programs were implemented. The current system fails to promote upward mobility – 34 percent of Americans raised in the bottom fifth of income remain there as adults.

Meanwhile, the costs of running these programs have skyrocketed. According to CBO, federal spending on welfare has nearly doubled between 2006 ($369 billion) to 2016 ($744 billion). When factoring in state government spending, total government spending on welfare programs already exceeds $1 trillion annually.

Without reform, CBO projects that federal spending alone will exceed $1 trillion by 2026.

Instead of throwing more money at federal programs, the JOBS for Success Act ensures that funds are responsibly used for the purpose this money is intended for. Reforming TANF will build on the success of tax reform by promoting upward mobility so that Americans can get a job and keep their job.

 

Photo Credit: Jim Grey


A Vote for the Farm Bill is A Vote for Welfare Reform and Upward Mobility

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Posted by Alex Hendrie, Tom Hebert on Thursday, May 10th, 2018, 9:00 AM PERMALINK

The Farm Bill Strengthens the Safety Net, Encourages Work, Promotes Upward Mobility, and Ensures Taxpayer Funds Are More Responsibly Spent

Next week, Congress is expected to take up H.R. 2, the Agriculture and Nutrition Act of 2018.

This legislation includes important reforms to the Supplemental Nutrition Assistance Program (SNAP) and represents an important step forward in enacting welfare reform.

The 2018 farm bill includes important reforms to the SNAP program that will help ensure the program is achieving the goal of promoting upward mobility while simultaneously protecting the most vulnerable in our society. For instance:  

  • The farm bill requires requiring individuals on SNAP that are between ages 18 to 59 to work and/or participate in employment training for at least 20 hours per week (individuals with a disability, are pregnant, or are caretakers are exempt from this requirement).
  • The farm bill increase funds available for a work training program for SNAP recipients from $90 million to $1 billion per year. The plan also mandates that states provide a training slot to every work-eligible SNAP recipient. Estimates show that this would free one million Americans from government dependency over the next decade.
  • The farm bill establishes a Duplicative Enrollment Database to make sure recipients aren’t receiving SNAP benefits from multiple states.
  • The farm bill introduces a pilot program where food stores provide bonuses to SNAP households that buy fruits, vegetables and milk.

There is a clear need to reform the safety net. SNAP is just one example of the failure of government to provide a welfare program that works.

President Ronald Reagan famously said: “The Federal Government declared a war on poverty, and poverty won.” Unfortunately, this statement still rings true over three decades later.

Despite the trillions of dollars spent on welfare programs since President Johnson’s Great Society plan was enacted, the poverty rate in 2014 (14.8 percent) is actually worse than it was in 1966 (14.7 percent). Programs are still not helping Americans get out of poverty. 34 percent of Americans raised in the bottom fifth of income are still trapped there as adults.

Meanwhile, the costs of running these programs have skyrocketed. According to CBO, federal spending on welfare has nearly doubled between 2006 ($369 billion) to 2016 ($744 billion). Without reform, CBO projects that federal government spending on welfare will exceed $1 trillion by 2026.

Throwing billions of dollars at the problem has clearly failed to solve the problem. Instead, expensive, poorly-run government programs have kept low-income Americans from achieving the American dream for far too long.

In 2016, the Mercatus Center reported that 18 percent of Americans receive food stamps. Yet, only 1 percent of American households likely need them. As a result, the program costs about $70 billion per year. Further, there are currently more than 20 million able-bodied adults on SNAP, even though there are 6 million open jobs across America.

Interestingly, Governor Sam Brownback implemented similar work requirement reforms (and time limits) in the Kansas food stamp program in 2013.

The Foundation for Government Accountability studied the results in 2016 and found that the reforms were a success. Before the Kansas food stamp reforms, 1 in 5 able-bodied food stamp recipients worked, and 93 percent of them were in extreme poverty. After the reforms, 75 percent of the able-bodied adults in the program dropped out. 60 percent of able-bodied adults that no longer needed food stamps found jobs within 12 months. Further, their incomes rose by about 127 percent per year, and average income for able-bodied working adults is now above the poverty line. 

On the federal level, Kansas-style welfare reform centered on upward mobility would help low-income Americans move up the economic ladder by incentivizing work.

The Agriculture and Nutrition Act is far from perfect and lawmakers should continue to strengthen the bill by offering other common sense reforms, such as fixing the outdated, wasteful sugar subsidy.

Even so, the welfare reforms including in the Farm Bill represent a step in the right direction toward reducing poverty, encouraging work, fostering upward mobility, and ensuring taxpayer dollars are responsibly spent.

Photo Credit: Carrie Larimer


The RSC Budget Proposal Builds on the Success of Tax Reform

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Posted by Alex Hendrie, Tom Hebert on Friday, April 27th, 2018, 11:30 AM PERMALINK

Republican Study Committee (RSC) Chairman Mark Walker (R-NC) and RSC Budget and Spending Task Force Chairman Tom McClintock (R-CA) released the RSC’s budget proposal this week. The budget, entitled “A Framework For Unified Conservatism,” enacts important policies like free market health care reform and responsible entitlement reform. 

Most importantly, the budget calls for pro-growth tax reform and making middle class tax cuts permanent. Chairman Walker and Chairman McClintock should be commended for this conservative budget outline.

The RSC budget calls for making the individual tax cuts from the Tax Cuts and Jobs Act permanent. Under the TCJA, 90 percent of wage earners are seeing increased take-home pay. A family of four earning the median income of $73,000 will receive a tax cut of more than $2,000 this year. Similarly, a single parent with one child earning $41,000 per year will see tax reduction of 73 percent, resulting in a $1,304 tax cut.

Unfortunately, arcane Senate procedure and the refusal of Democrats to support tax cuts meant that the individual provisions in the Tax Cuts and Jobs Act could not be made permanent. If Congress does nothing, these important tax cuts will sunset in 2026.

The RSC budget would make these important provisions permanent:

  • The doubling of the standard deduction to $12,000 and $24,000 for a family. This provision is a $690 billion tax cut between 2018 and 2025. If allowed to sunset, the standard deduction would revert to $6,000 for individuals or $12,000 for a family.
  • The reduction of nearly every individual income tax bracket, a tax cut of $1.2 trillion between 2018 and 2025.
  • The doubling of the child tax credit to $2,000 Child Tax Credit. This is a $533 billion tax cut between 2018 and 2025. If allowed to sunset, the CTC would revert to $1,000 per child.
  • A 20% deduction for pass-through businesses (LLCs, partnerships, S-corporations etc.). This is an 88 billion tax cut between 2018 and 2025.
  • The doubling of the death tax exemption to $11 million. This is a $69 billion tax cut between 2018 and 2025. If allowed to sunset, the exemption would revert back to $5.49 million, meaning more taxpayers, including many family owned businesses, would be hit by the death tax.
  • An increase in the threshold that the Alternative Minimum Tax hits individuals so that it kicks in at $1 million of annual income. This is a tax cut of $572 billion between 2018 and 2025. If this sunsets, millions of families will be hit by the AMT.

The RSC budget also calls for making full business expensing permanent ensuring strong economic growth continues. Prior to passage of the TCJA, businesses were forced deduct, or “depreciate” the cost of any new investments and assets over multiple years depending on the asset they purchase, as dictated by arbitrary IRS rules. Tax reform implemented immediate, full business expensing for five years with a phase-out of the provision over the next five years.

Expensing allows businesses to immediately deduct the cost of new equipment, and so encourages businesses to make more investment in the U.S. economy. Full expensing gives businesses a zero percent rate on the cost of new investments, which incentivizes more capital flowing into the economy, leading to stronger growth. 

According to research by the Tax Foundation, implementing permanent full business expensing increases GDP by five percent after a decade and increases wages by 4 percent, creating more than one million jobs.

Lastly, the RSC budget calls for entitlement reforms that ensure these programs grow at a sustainable rate. If entitlement spending is not reined in, these programs will continue to add hundreds of billions to the national debt each year. Without reform, the Social Security Trust Fund will be completely depleted by 2035 and the Medicare Trust Fund will be empty by 2029. Modernizing Social Security and Medicare are imperative in order to save the programs.

This RSC budget makes multiple changes to Social Security, starting with implementation of the Social Security Reform Act to achieve long-term sustainable solvency. Second, the plan gradually phases in an increase of the eligibility age to 70 to keep up with a rising mortality rate. Third, the framework modernizes the benefit formula for new retirees, provides additional support for the most vulnerable, reduces the barriers to staying active in retirement, and prohibits overpayment debt discharge.

The framework also implements needed reforms to Medicare. First, the plan reduces costs for beneficiaries by implementing premium support in 2023 while including traditional fee-for-service as an option. Second, the framework phases in an increase in the eligibility age to account for longer lifespans. The plan combines Parts A & B, reforms Medigap, and phases in increase premiums and means testing.

These reforms will place important programs on a sustainable path, ensuring they continue to serve those in need.

Photo Credit: Flickr


Senator Cornyn Introduces the Small Business Taxpayer Bill of Rights Act

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Posted by Tom Hebert on Friday, April 27th, 2018, 11:15 AM PERMALINK

With all the time and effort that goes into running a successful small business, worrying about tax compliance should be near the bottom of any entrepreneur’s to-do list.

S. 2689, the “Small Business Taxpayer Bill of Rights Act,” introduced by Senator John Cornyn (R-Texas) and co-sponsored by Senator Dean Heller (R-NV) and Senator Pat Roberts (R-KS), implements numerous IRS reforms so that small business owners are treated fairly and adequately protected from IRS overreach.

Senators should co-sponsor and support this bill to ensure that business can spend more time creating jobs and increasing wages, and less time complying with burdensome IRS rules.  

Bringing Relief to Small Businesses

Small businesses are the engine of the American economy. There are approximately 30 million small businesses, and workers employed by small businesses comprise approximately 99% of the workforce. The reforms in this bill will bring much-needed relief to small business owners who have struggled under a dysfunctional IRS for far too long.

As its name suggests, the Small Business Taxpayer Bill of Rights Act bill brings much-needed relief to small businesses. If passed, this legislation would require the IRS to release a levy (a seizure of assets) if it is creating an economic hardship for the taxpayer. This would give small businesses another chance to comply with the IRS without having to shut down or fire employees.

Compensates Taxpayers for IRS Bureaucracy and Misconduct

One of the most ridiculous ways that the IRS abuses taxpayers is by subjecting them to random audits by the IRS’s National Research Program. These random audits are called “super-audits” because they are performed to improve tax administration. Even if the taxpayer is fully compliant with the audit, the NRP’s audits are significantly burdensome. Taxpayers selected for super-audits are essentially guinea pigs: they have to contend with random and intensive audits as well as pay for their own representation. The Cornyn bill would alleviate the financial burden by allowing taxpayers to deduct $5,000 for NRP-related expenses.

The bill also increases the ability of taxpayers to seek compensation to taxpayers in the case of IRS misconduct. For instance, Sen. Cornyn’s bill expands eligibility for small businesses to recoup attorney fees when the IRS takes action against them that are not substantially justified.

In addition, the law allows taxpayers to claim up to $5,000,000 in damages in a civil action when the IRS engages in abusive or reckless conduct, increases the maximum penalty imposed on IRS agents that engage in extortion, fraud, and bribery to $25,000, and allows taxpayers to receive $10,000 (indexed for inflation) for every unauthorized inspection or disclosure of their tax information by a government employee or officer.

Strengthens Taxpayer Protections

The bill contains numerous also contains provisions to ensure the IRS is acting in the best interests of taxpayers. The new legislation bans secret communications between the IRS and the IRS Office of Appeals when discussing a taxpayer’s case, and makes violations of this new rule a fireable offense. This safeguard ensures that the Office of Appeals is truly independent. The Cornyn bill also requires taxpayer consent before including IRS Counsel or compliance officials to participate in an Appeals conference, overturning a recent rule that needlessly increases the contentiousness of the appeals process.

In addition, the Cornyn bill increases the fine for unauthorized disclosure of taxpayer information by IRS employees from $5,000 to $10,000. Leaking taxpayer information is a felony and can land the offending IRS employee in jail for up to 5 years.

Equal Treatment Under the Law

In order to ensure that taxpayers are not targeted for audits by their race, religion, or political ideology, S.2689 would require the Treasury Inspector General for Tax Administration (TIGTA) to consult with the IRS on any criteria it uses to select tax returns for audits. Conservatives know the importance of maintaining safeguards against being targeted for political ideology.

A notable example of the IRS’s abuse of taxpayers is its systemic targeting of conservative groups. IRS employee Lois Lerner’s hatred for conservatives and tea party groups led to only one of them gaining non-profit status in 3 years. Lerner targeted tea party groups with onerous audits to sideline them from participating in the 2012 election. This bill would be an excellent first step in ensuring that taxpayers aren’t targeted for audits based on race, religion, or political ideology.

Photo Credit: Gage Skidmore


House To Vote On IRS Reforms

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Posted by Tom Hebert on Monday, April 16th, 2018, 12:00 PM PERMALINK

The Internal Revenue Service is an agency that is long overdue for modernization and reform. It has been two decades since the agency faced significant reform, when Congress passed the IRS Reform and Restructuring Act of 1998 (RRA). Since then, the IRS has been plagued with mismanagement and has struggled to adapt to the modern digital age.

This week, the House of Representatives will vote on a number of bills that update the IRS. One of the most significant bills is H.R. 5444, the “Taxpayer First Act,” sponsored by Ways and Means Oversight Subcommittee Chair Lynn Jenkins (R-KS).

This legislation implements several necessary IRS reforms that would improve the efficiency of the agency, ensure taxpayers are protected from the agency, and ensure that Americans can more easily comply with the tax code.

Ensuring Americans Can Comply with the Tax Code

For many American families, filing taxes is a time consuming and overly complex process. Recent estimates of tax complexity have found that families and businesses spend more than 8.9 billion hours and $400 billion complying with the code every year.

One way these problems are mitigated is through the Free File Program, a public-private partnership available that has served more than 40 million taxpayers and saved $1.3 billion in preparation costs since its inception. The program offers 70 percent of taxpayers, or those making with less than $66,000 in adjusted gross income, access to electronic filing software provided by leading private companies free of charge.

H.R. 5444 expands and strengthens Free File by making the program permanent and requiring the IRS to work with state governments in order to ensure the program is available at the state level and promotes simplicity and efficiency. The legislation also requires the IRS to work with the private sector to design new programs that make it easier for taxpayers to complete and file their tax returns.

Implementing Taxpayer Protections from the IRS 

The Taxpayer First Act implements several reforms to protect taxpayers from the IRS in the case of an audit.

First, the legislation increases the protection over confidential taxpayer data by prohibiting the IRS from outsourcing taxpayer information to outside contractors unless necessary for expert evaluation of the information at hand.

Second, H.R. 5444 also safeguards the designated summons process against abuse by requiring the IRS to disclose a documented history of reasonable requests of information from the taxpayer to the head of the relevant operating division and its division counsel.

Third, H.R. 5444 improves enforcement of tax laws in several different ways, the first being adjustments to structuring laws. Under present law, banks are required to report currency transactions exceeding $10,000 to the IRS. This proposal would require the IRS to issue a 30-day notice to the owner of any seized assets to inform him of his rights in any post-seizure hearings. 

Lastly, H.R. 5444 makes adjustments to notice of contact of third parties. The new bill requires that the IRS to give taxpayers a 45 day notice before contacting a third party to collect taxpayer liabilities.

While more remains to be done, these reforms move in the right direction toward ensuring taxpayers are protected from IRS overreach.  One of the most egregious examples of IRS abuse in recent memory is when the agency broke federal law to hire a Democrat white-shoe law firm to audit Microsoft. Quinn Emmanuel’s services, which cost taxpayers $1,000 an hour, could have easily been performed by the IRS’s 40,000 in-house enforcement officers. The IRS’s decision to hire an outside law firm to audit Microsoft calls the agency’s judgment into question as well as its use of limited resources. 

Reforms that safeguard the American people against abuse from IRS career bureaucrats is long overdue. The Taxpayer First Act is an excellent first step in reforming and modernizing the troubled agency and should be supported by all members of Congress. 

Photo Credit: Tim Evanson


Trump Tax Cuts Boosting GDP, Business Confidence

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Posted by Tom Hebert on Tuesday, April 3rd, 2018, 3:19 PM PERMALINK

The economy grew at 2.9 percent in the last quarter of 2017, according to the Bureau of Economic Analysis. This news proves that President Trump’s tax cuts are working and shows a clear contrast between the sluggish 1.3 percent growth of the Obama years.

Deregulation is also responsible for this economic uptick. For every new regulation put on the books in fiscal year 2017, 22 regulations were slashed. This has saved a combined $8.1 billion in net federal regulatory costs so far. Cutting bureaucratic red tape and making it less costly to do business has been one of Trump’s best economic achievements so far. 

Since Trump became president, business confidence in the economy is at an all-time high, according to the RMM US Middle Market Index. Economic growth has neared 3 percent over the past year, resulting in strong wage growth for middle class families.

A major part of this success is due to the passage of the Tax Cuts and Jobs Act. As a direct result of this bill, nearly 500 companies have announced bonuses, pay increases, or expanded employee benefits. 

The tax bill reduced taxes for businesses of all sizes. The competitive, 21 percent corporate rate and the 20 percent deduction for pass-throughs businesses has allowed corporations and small businesses to hire more workers, invest in new equipment, or upgrade equipment.

Foreign investment in the United States is also at a record-breaking $35.5 trillion, according to data from the U.S. Bureau of Economic Analysis. This includes $8.9 trillion in U.S. factory investments and $8 trillion invested in shares of U.S. companies. President Trump’s pro-free market policies have encouraged foreign companies to invest in the United States instead of buying American exports.

Tax reform is not just good for American businesses and the economy. Families and individuals are also benefiting from the Tax Cuts and Jobs Act. 

Over 90% of Americans have received a tax cut under the new tax code. Between 2018 and 2025, Americans will see a $1.17 trillion tax reduction as a result of the bill. A family of four earning $73,000 will see over $2,000 in tax cuts, a tax reduction of 58%  A single parent with one child earning $41,000 per year will see $1,304 in tax cuts, a tax reduction of 73 percent. 

The contrast between the Trump Administration and the Obama Administration couldn’t be clearer. Obama’s economic policy hampered growth and investment, while Trump’s policies are encouraging economic growth and investment. As tax reform and deregulation continue to spur economic growth and create jobs, we’ll see more good economic news in the months and years to come.

Photo Credit: Gage Skidmore


Congress Should Pass Congressman Rokita's "CRUMBS Act"

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Posted by Tom Hebert on Monday, March 26th, 2018, 1:28 PM PERMALINK

In the past several months, the Tax Cuts and Jobs Act has encouraged over 450 companies to announce pay increases, bonuses, or increased employee benefits. Approximately 4 million workers have already received tax reform bonuses, and the number is increasing by the day.

The economy also added 300,000 jobs in February, unemployment is at a 17 year low, and more than 90% of Americans have already seen more money in their paychecks.

Despite these benefits, Democrats have consistently attempted to undermine and dismiss the positive impacts of tax reform. Not a single Democrat voted to cut taxes for Americans, and they are now downplaying any benefits from the law.

Minority Leader Nancy Pelosi (D-Calif.), who has a net-worth of approximately $30 million, famously derided tax cuts for the middle class as “crumbs.” Pelosi has also called the bonuses companies are giving to employees as a result of the tax bill “pathetic.” 

The median income in 2017 was $59,039, so a typical Trump tax reform bonus of between $1,000 and $2,000, is money that an American family can use to pay bills, buy groceries, or put gas in the car.

Congressman Todd Rokita (R-Ind.) has introduced legislation to allow the millions of Americans who have received tax reform bonuses to keep what they’ve earned. H.R. 5012, the Creating Real and Useful Middle-Class Benefits and Savings (CRUMBS) Act, would exempt bonuses up to $2,500 from taxable income.  

The CRUMBS Act builds on the success of the Tax Cuts and Jobs Act by letting workers keep their bonuses tax-free. All members of Congress should support this important legislation.

[View ATR's letter of support for H.R. 5012 here]

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Congress Should Pass Rep. Davis' "Permanent Tax Cuts for Americans Act"

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Posted by Tom Hebert on Monday, March 19th, 2018, 1:30 PM PERMALINK

The Tax Cuts and Jobs Act was a historic piece of legislation that brought real relief to over 90% of Americans.

Between 2018 and 2025, Americans will see a $1.17 trillion tax reduction as a result of the bill. In 2018, a family of four earning $73,000 will see over $2,000 in tax cuts, while a single parent with one child earning $41,000 per year will see $1,304 in tax cuts.

Despite the desperate attempts by the Democrat Party to smear the Tax Cuts and Jobs Act as Armageddon, the numbers show otherwise.

For a family of four, an extra $2,000 per year is a lot of help. That money can put more food on the table, gas in the car, or pay for a family vacation. These savings may be crumbs to Nancy Pelosi, with her $30 million net worth, but they have been extraordinarily helpful to average Americans.

Unfortunately, procedural hurdles have prevented lawmakers from making these provisions permanent. If Congress does nothing, these important tax cuts will sunset in 2026.

Congressman Rodney Davis (R-Ill) has introduced legislation to alleviate this problem. H.R. 4886, the “Permanent Tax Cuts for Americans Act,” would make these temporary tax cuts a permanent reality for the American people. [Read ATR's letter in support of H.R. 4886 here]

The provisions include some of the most beneficial aspects of the GOP tax bill. The following provisions would become a permanent part of the tax code if H.R. 4886 is signed into law:

  • A $12,000 standard deduction for an individual, or a $24,000 standard deduction for a family. If allowed to sunset, the standard deduction would revert to $6,000 for individuals or $12,000 for a family.
  • The reduction of nearly every income tax bracket, a tax cut of $1.2 trillion between 2018 and 2025.
  • A $2,000 Child Tax Credit (CTC). If allowed to sunset, the CTC would revert to $1,000 per child.
  • A 20% deduction for pass-through businesses, which are largely small businesses.
  • An $11 million death tax exemption. If allowed to sunset, the exemption would revert back to $5.49 million.
  • An increase in the Alternative Minimum Tax exemption so that it only hits families earning $1 million or more, a tax cut of $572 billion between 2018 and 2025.
     

The individual tax reductions in the GOP tax bill have helped American workers and families. These provisions are vital to the Tax Cuts and Jobs Act’s success, and byzantine procedural constraints shouldn’t keep them from becoming permanent.

All members of Congress should support H.R. 4886 and make these tax cuts permanent for all Americans.

[Read ATR's letter in support of H.R. 4886 here]

Photo Credit: ttarasiuk


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