Full List of Hillary’s Planned Tax Hikes
[Click here to see the updated list of Hillary's Planned Tax Hikes]
Hillary Clinton has made clear she intends to dramatically raise taxes on the American people if elected. She has proposed an income tax increase, a business tax increase, a death tax increase, a capital gains tax increase, a tax on stock trading, an "Exit Tax" and more (see below). Her planned net tax increase on the American people is at least $1 trillion over ten years, based on her campaign’s own figures.
Hillary has endorsed several tax increases on middle income Americans, despite her pledge not to raise taxes on any American making less than $250,000. She has said she would be fine with a payroll tax hike on all Americans, she has endorsed a steep soda tax, endorsed a 25% national gun tax, and most recently, her campaign manager John Podesta said she would be open to a carbon tax. It’s no wonder that when asked by ABC's George Stephanopoulos if her pledge was a "rock-solid" promise, she slipped and said the pledge was merely a “goal.” In other words, she's going to raise taxes on middle income Americans.
Hillary’s formally proposed $1 trillion net tax increase consists of the following:
Income Tax Increase – $350 Billion: Clinton has proposed a $350 billion income tax hike in the form of a 28 percent cap on itemized deductions.
Business Tax Increase -- $275 Billion: Clinton has called for a tax hike of at least $275 billion through undefined business tax reform, as described in a Clinton campaign document.
“Fairness” Tax Increase -- $400 Billion: According to her published plan, Clinton has called for a tax increase of “between $400 and $500 billion” by “restoring basic fairness to our tax code.” These proposals include a “fair share surcharge,” the taxing of carried interest capital gains as ordinary income, and a hike in the Death Tax.
But there are even more Clinton tax hike proposals not included in the tally above. Her campaign has failed to release specific details for many of her proposals. The true Clinton net tax hike figure is likely much higher than $1 trillion.
For instance:
Capital Gains Tax Increase -- Clinton has proposed an increase in the capital gains tax to counter the “tyranny of today’s earnings report.” Her plan calls for a byzantine capital gains tax regime with six rates. Her campaign has not put a dollar amount on this tax increase.
Tax on Stock Trading -- Clinton has proposed a new tax on stock trading. Costs associated with this new tax will be borne by millions of American families that hold 401(k)s, IRAs and other savings accounts. The tax increase would only further burden markets by discouraging trading and investment. Again, no dollar figure for this tax hike has been released by the Clinton campaign.
“Exit Tax” – Rather than reduce the extremely high, uncompetitive corporate tax rate, Clinton has proposed a series of measures aimed at inversions including an “exit tax” on income earned overseas. The term “exit tax” is used by the campaign itself. Her campaign document describing this proposal says it will raise $80 billion in tax revenue, but claims some of the $80 billion will be plowed into tax relief. How much? The campaign doesn't say.
This proposal completely fails to address the underlying causes behind inversions: The U.S. 39% corporate tax rate (35% federal rate plus an average state rate of 4%) and our "worldwide" system of taxation, which imposes tax on all American earnings worldwide. The average corporate rate in the developed world is 25%. Thirty-one of thirty-four developed countries have cut their corporate tax rate since 2000. The U.S. has not. Hillary's plan moves in the wrong direction.
ATR is tracking Clinton’s full tax record at its dedicated website, HighTaxHillary.com
See also: "Everyman" Tim Kaine Tried to Raise Taxes on Adult Beverages
Hillary Opens the Door to a Carbon Tax
Hillary's Soda Tax Endorsement Violates Middle Class Tax Pledge
Video Shows Hillary's 25% Gun Tax Endorsement
Democrat Platform Calls for Carbon Tax
Tim Kaine Pushed Income Tax Hikes on Working Families Making As Little as $17,000
More from Americans for Tax Reform
Popular Blueprint Nebraska Tax Plan Calls for Lower Income and Property Taxes
An innovative plan to overhaul the Cornhusker State’s tax code is gaining momentum among legislators as state revenue collections continue to smash expectations.
Blueprint Nebraska, an economic report sponsored by the Platte Institute, outlines 15 concrete steps to modernize the state’s economy, primarily by lowering key taxes and broadening the sales tax base. The recommendations aim to improve five key priorities: job growth, quality of life, population growth, income growth, and research and development.
Most notably under the Platte Institute’s plan, taxpayers would see $2 billion in additional property tax relief. With a property tax rate of 1.65% – the 7th highest in the country – Nebraska remains uncompetitive in the region, where states like Oklahoma and North Dakota have property tax rates below 1%. The Blueprint plan would significantly ease the burden on Nebraskan homeowners and create a lucrative new incentive for families moving to the region.
Lawmakers already approved a “Truth in Taxation” law during the 2021 legislative session, requiring municipalities that raise property taxes by more than 2% to inform voters of the increase directly by mail. With the new notification requirement, property owners will no longer be hit with surprise bills as a result of secretive local tax hikes.
The Platte Institute also hopes to dramatically revamp corporate taxes in the state. Rates currently at 7.81% for income above $100,000 would be lowered biannually before reaching 4.99% in 2028. Small businesses making under $100,000 would see rates slashed immediately by more than a quarter, from 5.58% to 4%.
The report’s third major priority calls for eliminating the state income tax on Nebraskans’ first $50,000 in earnings. All other income would be subject to a flat tax identical to the corporate rates, phased down to 4.99% in 2028. In exchange for the tax cut, itemized deductions would also be eliminated, ultimately making the tax code fairer and flatter.
These income tax cuts would allow every family and small business to keep more of their hard-earned dollars in their wallets, while giving potential new residents another reason to choose to invest in Nebraska.
The true strength of the Blueprint framework, however, is in its proposed alternatives for state funding. The state sales tax rate of 5.5% – already lower than Nebraska’s peer states – would not increase, nor would it be applied to groceries. Instead, the plan would end most other sales tax exemptions, apply the tax to services, and broaden the tax base.
Polling shows this approach is popular with voters across the political spectrum. In a survey conducted earlier this year, 58% of Democrats, 57% of independents, and 61% of Republicans approved of a tax plan that cut property and income taxes while eliminating sales tax exemptions.
Relying more on sales taxes gives families and businesses more control over the amount of taxes they pay. With substantially lower property, corporate and income tax rates, as well as an elimination of the inheritance tax, residents will save money and pay taxes in a way they are more comfortable with. Families on both sides of the aisle understand the tremendous implications of the Platte Institute’s modernization plan.
This year, Nebraska legislators approved a small cut in the top corporate income tax rate from 7.81% to 7.25% over two years. But as state revenues soar to new highs, Platte Institute Policy Director Sarah Curry says the extra money could encourage the legislature to take a bolder approach to cutting taxes.
“As these revenue numbers continue to be positive, it’s clear a faster implementation of the rate reduction is affordable for the state budget,” she said. Even without adopting the Blueprint plan, “the Legislature intends to eventually match the top personal income tax rate, which is currently 6.84%."
As the state offers a more welcoming tax structure to future residents and businesses, state finances will also benefit under the Blueprint framework. A modernized tax code would bring nearly $500 million in additional revenue to Nebraska despite big rate cuts, according to an independent fiscal analysis.
Nebraska legislators should look to the Blueprint framework during next year’s session as they consider how to best utilize higher state revenue and more than $1 billion in federal stimulus funds. Nebraska families and businesses deserve lower rates and a more competitive economy.
Photo Credit: Tequask
More from Americans for Tax Reform
ATR Leads Coalition Letter Opposing Biden's Banking Regulator Nominee
Today, Americans for Tax Reform led a coalition letter to the Senate Committee on Banking, Housing, and Urban Affairs, opposing President Biden's nominee to serve as the head of the Office of the Comptroller of the Currency (OCC), Saule Omarova.
"President Biden’s nominee to head the OCC is one of the most radical picks he has made since his time in office. Saule Omarova’s adoration for big government and desire to eliminate private banking in the United States is evidenced by her writings. It would be a mistake for the United States Senate to confirm someone whose policy ideas would restructure the banking system in such a way that would eliminate free market enterprise and surely cripple an economy that is already struggling to fend off inflation and the economic repercussions of the COVID-19 pandemic," said Grover Norquist, President of Americans for Tax Reform.
The OCC is an independent bureau housed within the Treasury Department, which "charters, regulates, and supervises all national banks, federal savings associations, and federal branches and agencies of foreign banks."
Townhall also published an ATR op-ed underscoring concerns that both Republicans and Democrats have with Omarova.
Text of the coalition letter can be read below:
November 5, 2021
The Honorable Sherrod Brown
Chairman
Senate Committee on Banking, Housing, and Urban Affairs
534 Dirksen Senate Office Building
Washington, D.C. 20510
The Honorable Patrick Toomey
Ranking Member
Senate Committee on Banking, Housing, and Urban Affairs
534 Dirksen Senate Office Building
Washington, D.C. 20510
Dear Chairman Brown and Ranking Member Toomey:
The undersigned organizations oppose the nomination of Saule Omarova to head the Office of the Comptroller of the Currency (OCC).
Omarova will undoubtedly expand the size, scope, and authority of the OCC to the limit. There is also no question that she will advocate for instituting a cultural shift in the banking industry that will drive private financial institutions out of business and centralize all financial power with the federal government, all in the name of “equity.”
If Omarova is confirmed to the position, she will be able to serve a five-year term as comptroller of the currency. As comptroller, Omarova would head the bureau that “charters, regulates, and supervises all national banks, federal savings associations, and federal branches and agencies of foreign banks.”
As you are aware, Omarova is a Cornell University law professor who graduated from Moscow State University and is a recipient of the Lenin Personal Academic Scholarship.
On her resume, Omarova states that she was a senior fellow at the Berggruen Institute from 2020-2021. The think tank was founded by Nicholas Bergguren, a self-proclaimed Marxist, and has a history of promoting Chinese communist propaganda in the news. Fox Business also reported that Omarova appears to have joined a Facebook group called Marxist Analysis and Policy. The group describes itself as “a platform for analysis, policy and polemics from the perspectives of a diverse range of Socialist and anti-capitalist views.”
What is most concerning about Omarova is that she would use her role to push “equity” policies that increase the federal government’s footprint in the market. Most notably, Omarova has advocated for the Federal Reserve to provide deposits and lending for individuals in the country—crowding out any private banking opportunities in the United States. Omarova has explicitly stated her support for replacing private bank deposits with the Federal Reserve in the name of “equity.” Omarova says that, “the ultimate ‘end-state’” in her writing is where “FedAccounts fully replace—rather than compete with—private bank deposits.” This would be a total overhaul of the banking system in the United States, effectively eliminating all free market competition in the banking system.
Consolidating all deposits under the aegis of the Federal Reserve would be devastating for community banks. The Federal Deposit Insurance Corporation (FDIC) pointed out that in 2019 on average 84 percent of community banks’ assets were funded with deposits. Omarova would effectively eliminate the main source of financing for small businesses and rural communities while Wall Street banks would continue to thrive off underwriting fees, M&A, and securities trading.
Omarova also harbors resentment toward the banking industry she has been tapped to regulate. In a CBC produced documentary entitled, Assholes: A Theory, Omarova expresses her bias toward the private banking industry. Omarova describes the financial services industry as “a quintessential asshole industry” with the goal of making “certain types of asshole behavior systemically unprofitable” so that this “behavior will naturally kind of fall away.” This explicit bias against the industry by itself should make her unqualified for the position she has been nominated for.
Additionally, Omarova has advocated for increased centralization of the American economy. In a 2016 paper she co-authored, Omarova states her belief that the federal government of the United States is best suited to regulate prices of commodities such as “fuels, foodstuffs, and some other raw materials” and “wage or salary indices.” These “systemically important prices and indexes”, in her opinion, are the key to promoting financial market stability. This radical proposal would convey unprecedented authority to federal financial regulators to the extent that the financial markets in the United States would be totally controlled by the federal government.
Omarova is not shy about expanding the size of the federal government. For example, in an article she wrote in April of 2020, Omarova stated the need for a new permanent federal agency to bail out companies during crises. Omarova states that “having a permanent institutional platform for coordinating the national crisis response, including bailouts of private companies, would help to ensure that these emergency measures are executed in an efficient, transparent, and democratically accountable, and socially just manner.” Omarova calls this agency the National Investment Authority. She envisions this new centralized investment juggernaut to “act directly in financial markets as a lender, guarantor, securitizer, and venture capitalist with a broad mandate to mobilize, amplify, and direct public and private capital to where it’s needed most.” So, the federal government gets to decide where capital should be allocated, not private banks who have actual shareholders that will hold them accountable.
Omarova is also critical of cryptocurrencies. In an article Omarova wrote for the Harvard Law School Forum on Corporate Governance, she claims that cryptocurrencies contribute to financial instability, fail to produce “activity in the real economy,” and “fuel financial speculation on an unprecedented scale.” In light of her opinions on cryptocurrencies, it is unlikely that Omarova would be supportive of potential proposals to engender greater collaboration or partnerships between fintechs and national banks. She would also likely support the development of a central bank digital currency to crowd out private tokens and push all crypto innovation out of the United States.
Senators should oppose Omarova and vote against her nomination to serve as the head of the OCC. The Senate needs to avoid confirming someone to the helm of the OCC that will overhaul the national banking system to reflect that of a totalitarian regime.
Sincerely,
Grover Norquist
President, Americans for Tax Reform
Ryan Ellis
President, Center for a Free Economy
David M. McIntosh
President, Club for Growth
Andrew F. Quinlan
President, Center for Freedom and Prosperity
Phil Kerpen
President, American Commitment
Carrie Lukas
President, Independent Women’s Forum
Heather R. Higgins
CEO, Independent Women’s Voice
Tom Hebert
Executive Director, Open Competition Center
Bryan Bashur
Executive Director, Shareholder Advocacy Forum
Katie McAuliffe
Executive Director, Digital Liberty
Andrew Langer
President, Institute for Liberty
Dick Patten
President, American Business Defense Council
Seton Motley
President, Less Government
Jeffrey Mazzella
President, Center for Individual Freedom
Thomas Jones
Founder, American Accountability Foundation
James L. Martin,
Founder/Chairman, 60 Plus Association
Saulius “Saul” Anuzis,
President, 60 Plus Association
Dave Wallace
President, FAIR Energy Foundation
John Berlau
Senior Fellow, Competitive Enterprise Institute
David Williams
President, Taxpayers Protection Alliance
Photo Credit: "The Treasury Department" by Robert Lyle Bolton is licensed under CC BY 2.0
More from Americans for Tax Reform
Build Back Better Act Protects Big Tobacco & Robs From The Poor To Give To The Rich
Press Release: Build Back Better Act Protects Big Tobacco & Robs From The Poor To Give To The Rich
Americans for Tax Reform today called on House Democrats to match their rhetoric with their votes and vote NO on new taxes on people quitting smoking. H.R. 5376, The Build Back Better Act, includes new taxes on lifesaving alternative nicotine delivery systems which would see some prices double and could make them more expensive than deadly combustible cigarettes. Democrat leadership plan to use these funds to pay for the SALT Deduction tax break for the super-wealthy.
“If House Democrats truly cared about social justice and poorer Americans, they would oppose the immoral new taxes in the Build Back Better Act designed to protect cigarette companies, discourage smokers from quitting, and redistribute funds from low-income earners to the wealthy elite” said Tim Andrews, Director of Consumer Issues.
“Millions of Americans have successfully quit smoking through reduced risk tobacco alternatives, which the FDA has ruled appropriate for the protection of public health. To tax products these products higher than deadly combustible cigarettes is simply outrageous, and will lead to more Americans smoking – with tragic consequences. Academic research estimates these taxes would lead to 2.75 million more American smokers, and security analysts are already urging investors to purchase shares in tobacco companies as the Build Back Better Act would “would effectively protect U.S. cigarette sales”
Andrews also noted how the nicotine tax is being used to pay for SALT deductions, almost all of which will be used to benefit persons earning over $1 million annually, while users of these products overwhelmingly come from the poorest segments of society:
“With the vast majority of users of reduced risk tobacco alternatives low-income earners, this highly regressive tax not only blatantly violates Joe Biden’s pledge to not increase taxes on persons earning under $400,000, by using it to fund the SALT deduction for the wealthy elite, it is quite literally a tax on the poor to give to the rich. It beggars belief that so-called “progressives” could ever support this reverse Robin Hood.”
Andrews concluded: “Small increases in revenue must never come at the expense of human lives. We call on all Democrats to stand up for their constituents, and vote against this immoral new tax. Millions of lives quite literally depend on it.”
Photo Credit: Centophobia
More from Americans for Tax Reform
Dem Bill Gives Special Tax Handout to Media Companies with Up to 1,500 "Local Journalists"
TAKE ACTION: Reject Democrats Reckless Tax-and-Spend Bill
The reconciliation bill working its way through the U.S. House calls on the American taxpayer to subsidize Democrats' media allies. The bill provides a special tax cut for the media under the guise of helping "local journalists" but eligible media companies will receive the funds for up to 1,500 reporters per company.
This provision would provide a refundable payroll tax credit equal to 50 percent of wages up to $12,500 per quarter per employee for the first four calendar quarters and a 30 percent credit for each calendar quarter thereafter.
On page 1,957 of the 2000+page bill, section 138516 would create a tax credit for news organizations, including newspapers and broadcasters such as radio and television:
“The number of local news journalists which may be taken into account under subsection (a) with respect to any eligible local news journalist employer for any calendar quarter shall not exceed 1,500.”
The Poynter Institute today bragged that the tax handout would benefit "broadcasters, public and commercial" in addition to newspapers.
It appears that both NPR and PBS will be eligible to receive this special tax handout. The bill specifically mentions that the credit is not to be applied to “the Government of the United States, the government of any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing”; however there is an exception for public broadcasting entities as defined in the Communication Act of 1934. These public broadcasting entities are defined as:
“the Corporation, any licensee or permittee of a public broadcast station, or any nonprofit institution engaged primarily in the production, acquisition, distribution, or dissemination of educational and cultural television or radio programs.”
The progressive group ProPublica, which is trafficking in the stolen personal IRS files of thousands of Americans seems to be eligible as well. The bill disqualifies 501(c) (4) groups but allows 501(c)(3) groups such as ProPublica -- to be eligible.
Perhaps not coincidentally, while congressional Democrats push for tax increases, ProPublica publishes stolen private tax information and laments the "lavish lifestyles" of disfavored, "rich" Americans.
The bill also appears to be a big-media power play against small, one-person local outfits. The bill specifically excludes journalists who do not have "media liability insurance." This could be a cost barrier for many individuals seeking to truly cover local events in their community.
Several large, legacy daily newspapers, tv and radio broadcasting companies also appear eligible for the tax handout. Any newspaper eligible to receive these funds now needs to disclose this fact while editorializing in favor the Democrats' reconciliation bill.
Photo Credit: "Journalist with pipe" by C.A.D.Schjelderup licensed under CC BY-SA 4.0
Dem Bill Includes $900 Handout for Electric Bicycles
Taxpayers are on the hook for up to $900 of the purchase of an electric bicycle in Democrats’ most recent version of their reckless tax and spending spree.
According to the text of the bill, Section 136407 would create a new 30% refundable tax credit for electric bicycles purchased before January 1, 2026. The bill allows up to $3,000 of the cost of an “e-bike” to be taken into account for the credit, creating a maximum allowable credit of $900 for individuals. E-bikes costing as much as $4,000 would be eligible for the credit.
Could send up to $7,200 to e-bike owners before provision expires
The credit begins phasing out for joint filers earning $150,000 ($75,000 for individuals) at a rate of $200 per $1,000 of additional income. Filers would be allowed to claim 1 credit per year (2 per year for joint filers) meaning taxpayers would potentially subsidize multiple e-bikes purchased by the same filer year after year. The bill would allow for a married couple earning $150,000 to purchase two new electric bicycles every year and claim up to $7,200 in e-bike credits before the provision expires in 2026.
Ignores Ways and Means amendment cutting credit to 15%
While the original draft of the reconciliation package included a 30% e-bike credit, the Ways and Means committee amended the bill during mark-up to limit the credit to 15% and a maximum credit of $750. The latest version of the ignores amendments that passed in committee with Democrat support and instead increases the credit to 30% capped at $900.
Democrats want e-bikes to replace cars
Democrats’ e-bike tax credit is modeled off of legislation introduced earlier this year by Rep. Jimmy Panetta (D-California) and Rep. Earl Blumenauer (D-Oregon). In a press release accompanying the rollout of the legislation, Rep. Panetta stated the purpose of the e-bike credit was to “transition to greener modes of transportation” by "incentivizing the use of electric bicycles to replace car trips.”
Photo Credit: Richard Masoner
More from Americans for Tax Reform
Senator Cruz Introduces Bill to End Taxation of Inflationary Gains
Today, Senator Ted Cruz (R-Texas) introduced the Capital Gains Inflation Relief Act, a bill that would index many assets to inflation to protect taxpayers from paying taxes on inflationary gains. Rep. Warren Davidson (R-Ohio) introduced the same bill in the House of Representatives.
Senate cosponsors of this bill include Sens. Thom Tillis (R-N.C.), Mike Braun (R-Ind.), John Barrasso (R-Wyo.), Pat Toomey (R-Pa.), Jim Inhofe (R-Okla.), and James Lankford (R-Okla.).
“Senator Cruz should be commended for reintroducing the Capital Gains Inflation Relief Act. Not only does this bill end the unfair practice of taxing inflationary gains, but it will help grow the economy by encouraging saving, investment, and innovation. It is always a good idea to index capital gains to inflation but because of Joe Biden's inflation, it is more important than ever to do it now,” said Grover Norquist, President of Americans for Tax Reform.
Senator Cruz's legislation would index to inflation any common stock in a C corporation, digital assets, and any tangible property which is a capital asset or property used in the trade or business.
This bill is incredibly important, as the taxation of phantom gains has distortionary, perverse effects on investment. For example, it creates a “lock-in” effect, discouraging investors from selling their assets. This prevents investors from productively moving their money to invest in newer, more promising companies. It also discourages investors from investing in companies, particularly long-term investments. Stifled investment has a plethora of negative outcomes: slowed wage growth, new business growth, lower retirement account values, etc.
Inflation comprises a significant portion of capital gains taxes. In 2019, ATR calculated that inflation would have comprised 70 percent of the tax owed on IBM shares purchased in 1970, 64 percent of the tax owed on Exxon Mobil shares purchased in 2000, and the entire gain of Coca-Cola shares purchased in 1998.
Senator Cruz’s legislation is especially important now given inflation is running rampant. In September, the consumer price index increased by 5.4 percent on an annualized basis. The cost of gasoline has increased 42.1 percent in the past 12 months, used cars and trucks have increased 24.4 percent, while meats have increase 12.6 percent.
88 percent of voters say they are concerned about increased inflation, according to a recent Harvard CAPS and Harris poll. In fact, inflation is a top concern for voters across the country.
These trends will also erode the returns investors will get after selling and paying taxes on assets.
Interestingly, even current Senate Minority Leader Chuck Schumer (D-N.Y.) once supported ending inflation tax on capital gains. In a 1992 video then-congressman Chuck Schumer stated:
“If we really want to increase growth, there are proposals that we can do. I would be for indexing all capital gains and savings and borrowing.”
Current House Majority Leader Steny Hoyer (D-Md.) also supported indexing capital gains to inflation in 1992. He 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.”
The federal government should not continue their unfair practice of taxing phantom gains. Congress must act in order to protect retirees and investors from the rampant inflation they created. All lawmakers should support Senator Cruz’s Capital Gains Inflation Relief Act, spurring investment, economic growth, and innovation.
Photo Credit: "Ted Cruz" by Gage Skidmore is licensed under CC BY-SA 2.0.
More from Americans for Tax Reform
Dems Still Pushing IRS Bank Account Snooping, Says Treasury Official
Despite firm opposition from the American people, the Biden administration and congressional Democrats are still trying to insert IRS bank account snooping into the reconciliation bill, a top Treasury official said Wednesday during a panel sponsored by the Center for American Progress.
The Biden administration has proposed to give the IRS new power to automatically access bank account, Venmo, Paypal, and CashApp account inflows and outflows for all business and personal accounts with more than $600 in total deposits and withdrawals for what it describes as a "comprehensive financial account reporting regime." This would inevitably increase audits on taxpayers making less than $400,000 per year.
Natasha Sarin, Deputy Assistant Secretary for Economic Policy at the U.S. Treasury Department, said Democrats were "trying to get this past the finish line."
Sarin said:
"It won't surprise you to hear that I think that the information reporting provisions were an incredibly important part of the compliance agenda. And I think that without them there's a lot of good that's going to be done, but honestly a lot of good that we won't be able to do unless we have some light into these opaque income streams.
And so I'm hopeful that what we'll see over the course of the next few weeks -- there's a very committed group of senators -- Senators Kaine, Warner, and Carper who are very committed along with of course Chair Wyden and Senator Warren and many others trying to get this past the finish line. I think there are ways that we can get there and that we're going to be able to provide the IRS both information and resources that are going to fundamentally overhaul the way tax administration works in this country, all for the better."
Click here to view the clip, which starts at 56:20 in the video
Not only are Americans creeped out by President Biden's plan to have the IRS snoop on their bank accounts, the nation's most prominent progressive tax policy group says the plan won't even work.
The Tax Policy Center says the plan is "poorly conceived," and will "bury the agency in a sea of unproductive information" and "won't help" and "will fail."
On Oct. 19 Tax Policy Center senior fellow Steve Rosenthal wrote on Twitter:
"Biden's Treasury doubles-down on a poorly-conceived reporting proposal, casting its net far too wide, which may catch small businesses, but not the big fish (who cheat by stretching the tax law, not by hiding their cash flow). I tried to help at the start, but I gave up."
On Oct. 20 Rosenthal wrote on Twitter:
"If Congress wants to collect more money from the rich, it must pass better tax rules, which measure and time income accurately and do not create ambiguities that aggressive taxpayers and their highly-paid advisers can exploit. Bank reports on aggregate cash flows won't help."
On Oct. 16 Rosenthal was quoted in The Hill:
Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center, whose former director now works in the Biden administration, said the proposal is too expansive and thinks bank lobbyists “have touched a raw nerve” with their customers who are concerned about privacy.
“I think at the end of the day, this bank proposal will fail,” he said.
On May 3, Rosenthal wrote:
"In practice, the IRS’ task would be daunting and, in fact, bury the agency in a sea of unproductive information.
Biden’s plan is expansive: deposits and withdrawals must be reported for every account, individual or business, at every financial institution. Then, to construct taxpayer-specific information, the IRS must collate taxpayer-account information across many different financial institutions. That is because taxpayers often hold multiple accounts. Yet, whether collated or not, deposits and withdrawals are not income, unlike wages or interest. And deposits and withdrawals cannot be netted to calculate income, without substantial adjustments."
On Oct. 18 Rosenthal was quoted in The Washington Post:
"It’s still a deeply flawed proposal,” Rosenthal said. “Even at $10,000, the Biden bank proposal is still too sweeping, throws a net very wide, and it’s hard to see what fish they want to catch here.”
Biden wants to increase IRS funding by $80 billion to double the size of the IRS and hire 87,000 new auditors and agents. This quantity of agents is so large that it could fill every seat in Washington DC's Nationals Park, twice. It could fill the ancient Colosseum 1.74 times. 87,000 new IRS agents is more than the entire personnel on all 11 U.S. aircraft carriers.
Even Obama-era IRS chief John Koskinen – a longtime advocate of increasing the IRS budget – thinks Biden’s proposal is too much.
As reported by the New York Times:
“I’m not sure you’d be able to efficiently use that much money,” Mr. Koskinen said in an interview. “That’s a lot of money.”
Rather than fix the agency's longstanding mismanagement, ineptitude and abuse problems, Biden's approach will make the problem worse.
A recent HarrisX poll found that 70% of independents opposed the bank snooping provision.
Americans have a firm, categorical objection to the IRS snooping in their bank accounts.
Here are some quotations from a local news compilation from around the country:
“I don’t see what business it is of anyone’s what I spend out of my bank account."
“No, it’s not their business. I already tell them enough.”
“I don’t feel that’s appropriate, that the IRS should be looking into people’s bank accounts.”
“They’re trying to get in to see every little thing you’re doing.”
“It could be a little invasive.”
“It’s kind of over the top and I just think that it’s an invasion of privacy.”
“Our bank accounts, you’d think would be somewhat private if you’re just a regular Joe Schmo making money week-to-week.”
“I do not think the government should be intervening in individual bank accounts.”
“It is personal information, that’s why we file taxes, too. You know, they should not have access to all that stuff.”
“I don’t think it’s right, it’s not their business what’s in my bank account.”
Click here to view.
Democrat Bill Imposes Price Controls and 95% Excise Tax on Medical Innovation
The Democrat multi-trillion dollar tax and spend bill includes a 95 percent excise tax and price controls on American medical innovation. This proposal mirrors H.R.3, legislation pushed by House Speaker Nancy Pelosi (D-Calif.) and progressive lawmakers.
This proposal allows government bureaucrats to impose price controls on up to 20 medicines in Medicare Part B and Part D. If the manufacturer does not accept this government set price, they are hit with a 95 percent excise tax on the total revenues of the drug. The proposal also includes an inflationary rebate penalty on every medicine in Medicare Part B and Part D.
While supporters of this proposal falsely conflate the proposal with allowing the government to “negotiate,” this plan will actually undermine the market-based structure of Medicare Part D harming patients, manufacturers, and the American healthcare system. While it is imposed on a small group of medicines, it creates a new tax and regulatory structure that can be expanded to all cures and to the entire healthcare system and become a stepping stone toward socialized healthcare.
Price Controls Should Not be Conflated with “Negotiation”
Supporters of government price controls on American medicines routinely characterize this plan as allowing the government to negotiate with the private sector. This is misleading because there is already negotiation and competition in Medicare Part D.
Part D facilitates negotiation between pharmacy benefit managers (PBMs), pharmaceutical manufacturers, and plans. This system works because Congress created a non-interference clause when Part D was created, which prevents the secretary of Health and Human Services (HHS) from interfering with the robust private-sector negotiations.
Since the law’s enactment, the program has proven to be a successful model of healthcare by saving taxpayers billions of dollars and granting patients access to medicines at low costs. Under this system, plans are free to compete based on the goal of maximizing access and minimizing coverage costs.
Federal spending on Part D has come in 45 percent below projections and is just 14 percent of total Medicare spending. Average monthly premiums in 2019 were just $32.50 and have been stable since 2011. Part D spending also helps keep costs in the rest of Medicare down – it has decreased hospital admissions by 8 percent, resulting in $2.3 billion in annual savings.
According to a 2020 survey, 84 percent of seniors found their Part D premiums affordable and 93 percent found their plan convenient to use. 9 in 10 seniors are satisfied with the Part D drug coverage.
The Proposal Imposes a 95 percent, Retroactive Excise Tax on Hundreds of Medicines
The legislation enforces its price controls through a 95 percent, retroactive tax . This tax is imposed on the sales of a drug if the manufacturer does not agree to government-imposed prices. The tax starts at a 65 percent rate, increasing by 10 percent every quarter a manufacturer is out of “compliance.”
This tax is concerning for a number of reasons. It is imposed at such a high rate that it will result in income taxes above 100 percent of income even if applied to a portion of a business’s sales. In addition, it is imposed on sales, not income. Businesses are typically taxed on their income as it allows them to deduct expenses such as wages and other employee benefits, equipment, and machinery. A tax on sales is imposed irrespective of whether a business made any money.
H.R. 3 contained a more expansive version of the 95 percent excise tax. It was imposed on up to 250 medicines. Over time, Democrats will undoubtedly push to expand the tax to more and more medicines.
The Proposal Could Cost High-Paying Jobs Across the Country
President Biden has repeatedly promised to create millions of new high paying manufacturing jobs in America. However, H.R. 3 would threaten existing jobs by imposing taxes and price controls on American businesses.
Nationwide, the pharmaceutical industry directly or indirectly accounts for over four million jobs across the U.S and in every state, according to research by TEconomy Partners, LLC. This includes 800,000 direct jobs, 1.4 million indirect jobs, and 1.8 million induced jobs, which include retail and service jobs that are supported by spending from pharmaceutical workers and suppliers.
The average annual wage of a pharmaceutical worker in 2017 was $126,587, which is more than double the average private sector wage of $60,000.
Existing Part D Negotiation Already Protects Against Price Increases
The inflationary rebate penalty requires a manufacturer to pay a “fee” to the government if they increase the price of a medicine faster than inflation. In effect, this establishes a private sector ceiling or cap on the amount by which the price of a medication increases.
The government has no business dictating changes in price. There are many reasons the price of a product increases – whether that is through supply chain issues, labor shortages, or an increase in production cost.
Perversely, the inflationary rebate penalty could create an incentive for manufacturers to automatically increase the list price of their drugs each year to keep pace with inflation.
While inflation is hitting American families hard, the cost of medicines is actually decreasing. Prescription drugs have decreased by 1.6 percent on an annualized basis over the past 12 months, according to the Bureau of labor statistics. By comparison, the Consumer price index has increased by 5.4 percent over the same period. Many household goods and services have increased even more. For instance, gasoline has increased by 42 percent, meat has increased by 12.6 percent, furniture and bedding has increased by 11.2 percent and used cars and trucks have increased by 24.4 percent.
There are already mechanisms in Medicare Part D that keep costs down. For example, pharmacy benefit managers and manufactures negotiate “price protection rebates.” Under these agreements, any price increase past a predetermined threshold results in increased rebates from the manufacturers to the PBM. Today, almost 100 percent of medicines are subject to these rebates.
This Proposal is a Step Closer to Socialized Healthcare
Progressives are pushing proposals to expand the power that government has over the healthcare system like “Medicare for All” and the public option. These proposals also heavily rely on price controls on the healthcare system. Giving federal bureaucrats the ability to set prices in Medicare Part B and Part D would be a step toward this goal.
Imposing price controls are a key tool toward socialist healthcare because they allow the federal government to forcefully lower costs in a way that distorts the economically efficient behavior and natural incentives created by the free market.
When imposed on medicines, price controls suppress innovation and access to new medicines. This deters the development and supply of new life saving and life improving medicines to the detriment of consumers, patients, and doctors.
If the left had their way, government would control the entire healthcare system, an outcome that would also result in significant tax and spending increases and the loss of existing coverage for millions and millions of Americans.
It would lead to health care rationing, which occurs in other nations that have socialized health care, such as Canada and the United Kingdom. In the UK, there was a shortage of 10,000 doctors and 43,000 nurses in 2019, with 9 in 10 managers in the National Health Service saying that too few doctors and nurses presented a danger to patients. At any one time, 4.5 million patients were waiting to see a doctor or receive care.
France has been forced to make significant spending cuts to its “free” socialist healthcare system and there have been significant shortages of basic supplies. Australia has also experienced problems with shortages of medicines and healthcare professionals.
Photo Credit: "Male biomedical engineers develop blood filtering treatment" by This is Engineering is licensed under CC BY-NC-ND 2.0.
More from Americans for Tax Reform
Democrat Socialist Spending Bill Includes Corporate Tax Hike on Working Families
The latest version of the Democrats socialist tax and spend bill contains $800 billion in tax increases on corporations. The legislation, known as the “Build Back Better Act,” imposes a 15 percent domestic corporate minimum tax on “book income” as well as a 15 percent global minimum tax on American businesses operating overseas. The legislation also creates a tax on share repurchases.
While the Left claims they are going after large, profitable corporations, these tax increases will actually hit working families in the form of higher prices, fewer jobs, and lower wages.
The 15 percent global minimum tax would be created by increasing the tax rate on GILTI (Global Intangible Low-Taxed Income) and applying it on a country-by-country basis, rather than a worldwide basis. This change would create significant tax complexity and uncertainty for businesses operating overseas. It would make American businesses uncompetitive and could cost millions of jobs and tens of billions of dollars in U.S. investment, as noted by a study conducted by Ernst and Young.
This tax increase is part of the Biden administration’s goal to create a 15 percent global minimum tax agreement across the world, in order to “end the race to the bottom” and “make all citizens fairly share the burden of financing government.”
However, two-thirds of voters do not trust other countries to play by the rules when it comes to implementing and enforcing this agreement, according to recent HarrisX polling.
The 15 percent domestic minimum tax is based on the premise that corporations exploit tax loopholes to pay zero income tax every year. In reality, businesses utilize legal tax deductions and credits that were created on a bipartisan basis to promote investment, job creation, and growth.
For instance, corporations utilize full business expensing to deduct the cost of new equipment and investment. This policy incentivizes new investment, leading to greater economic productivity, job growth, and higher wages and simplifies the tax code by equalizing the tax treatment of new investments with other business expenses such as wages, rent, and healthcare costs.
There is strong bipartisan support for full business expensing. Former Obama Economic Adviser Jason Furman has long supported full business expensing, and the policy was included in several Obama budgets (albeit as part of a net tax increase). In addition, the Obama White House correctly noted that the provision would help businesses and workers in press releases and fact sheets.
The 1% tax on stock buybacks would harm Americans that have their life savings invested in 401(k)s, IRAs and the stock market. Eighty to 100 million Americans have a 401(k), 46.4 million households have an individual retirement account and half of Generation-Zers and Millennials are invested in stocks.
Buybacks occur when a company is reinvesting by returning funds to shareholders and the economy. Contrary to the left’s narrative, stock buybacks do not come at the expense of productive investment, instead occurring after a company has no better or higher use for cash.
These tax increases will not be borne by corporations but will be passed along to working families including those making less than $400,000 per year.
The Joint Committee on Taxation estimates that 25 percent of the corporate tax falls on workers while the Tax Foundation estimates that 70 percent of this tax is borne by labor. Similarly, a 2020 study by the National Bureau of Economic Research found that 31 percent of the corporate tax falls on consumers through higher prices.
81 percent of voters believe that raising taxes on businesses and corporations will cause them to raise the prices of goods and services including 89 percent of Republicans, 81 percent of independents, 74 percent of Democrats, and 81 percent of suburban voters. Similarly, 74 percent of voters believe that raising taxes on corporations will increase the price of goods and services for Americans making less than $400,000 per year.
Inflation has already raised the cost of goods and services for American families. The consumer price index increased by 5.4 percent on an annualized basis in September, matching a 13-year high, according to the Bureau of Labor Statistics (BLS). In January 2021, before Joe Biden took over the presidency, annual inflation was at a stable 1.4 percent.
As noted by BLS, the cost of many goods and services have increased significantly over the past year:
- Gasoline has increased 42.1 percent in the past 12 months.
- Used cars and trucks have increased 24.4 percent in the past 12 months.
- Meats have increased 12.6 percent in the past 12 months.
- Fresh fish and seafood have increased 10.7 percent in the past 12 months.
- Bacon has increased 19.3 percent in the past 12 months.
- Eggs have increased 12.6 percent in the past 12 months.
- Furniture and bedding have increased 11.2 percent in the past 12 months.
- Children’s footwear has increased 11.9 percent in the past 12 months.
The tax increases on corporations being proposed by President Biden and Congressional Democrats will not harm big businesses but will, instead, be passed along to working families. It will exacerbate inflation by increasing the costs of goods and services, while also reducing the life savings of Americans and making the U.S. less globally competitive.
Photo Credit: "Businessman showing empty pockets over flag of USA" by Jernej Furman is licensed under CC BY 2.0.
More from Americans for Tax Reform
ATR Supports H.R. 5773--The Stop Settlement Slush Funds Act of 2021
Today, the President of Americans for Tax Reform, Grover Norquist, sent a letter to the House Committee on the Judiciary expressing support for H.R. 5773, The Stop Settlement Slush Funds Act of 2021.
The bill, sponsored by Rep. Lance Gooden (R-Texas), would prohibit federal government officials from crafting settlement agreements that would funnel donations to activist groups that are favored by the political party running the executive branch.
Read the full text of the letter here or below:
November 3, 2021
The Honorable Jerrold Nadler
Chairman
House Committee on the Judiciary
2141 Rayburn House Office Building
Washington, D.C. 20515
The Honorable Jim Jordan
Ranking Member
House Committee on the Judiciary
2141 Rayburn House Office Building
Washington, D.C. 20515
Dear Chairman Nadler and Ranking Member Jordan,
I write in support of The Stop Settlement Slush Funds Act of 2021 (H.R. 5773), legislation that would prohibit federal government officials from crafting settlement agreements that would funnel donations to activist groups that are favored by the political party running the executive branch.
This bill is necessary because of reports that the Biden administration has revived the Obama administration policy of bankrolling left-leaning special interest groups using settlement money from civil suits. Under this initiative, government officials have required defendants to donate money to select activist groups within the terms of the settlement. Instead of providing remuneration for victims in civil suits, funds are being diverted to third-party organizations that are not directly involved in the lawsuit. This behavior is a gross politicization of the United States’ legal system and should be abhorred by both Republicans and Democrats.
During the Obama administration, the Department of Justice (DOJ) granted activist groups millions of dollars in under–the–table settlements, all while avoiding Congressional oversight.
For example, in 2014 the Obama DOJ and Bank of America agreed to a $17 billion settlement where millions of dollars of the settlement were siphoned off to Interest on Lawyers’ Trust Accounts and left-leaning groups such as the Affordable Housing Alliance, the Association of Community Organizations for Reform Now (ACORN), and the Mutual Housing Association of New York.
Moreover, this behavior may even be unlawful. These partisan settlement agreements appear to circumvent Congressional authority under the Appropriations Clause and violate both the Miscellaneous Receipts Act and the Antideficiency Act.
H.R. 5773 would expressly forbid such abusive ‘slush fund’ payments to activist groups, and guarantees money recovered in settlements is returned to the pockets of the American people, where it truly belongs. This bill ensures settlement money goes directly to victims, or alternatively to the Treasury, where elected officials, and not bureaucrats, determine how it is spent.
Previous iterations of this bill passed the House of Representatives three times with bipartisan support. I urge members of the House Committee on the Judiciary ouse House and all members of Congress to support H.R. 5773.
Sincerely,
Grover Norquist
President, Americans for Tax Reform
CC: Members of the House Committee on the Judiciary
Photo Credit: "Courtroom One Gavel" by Joe Gratz is licensed under CC0 1.0
More from Americans for Tax Reform
State news
Top Stories
