KEY VOTE: ATR Urges Passage of Senate FY ‘18 Budget Resolution


Posted by Alexander Hendrie on Tuesday, October 17th, 2017, 10:00 AM PERMALINK

The budget resolution is the vehicle to pass tax reform. Support for the budget equals support for tax reform

ATR urges a YES vote on the S.Con.Res. 25 as a pro-taxpayer vote 
  
“The Republican tax reform plan will turbo-charge the economy, create millions of new jobs and make America the best place in the world to invest, build and create,” said Grover Norquist, president of Americans for Tax Reform. "The first step toward passing this tax reform plan is for congress to pass a budget resolution that unlocks reform." 

[ATR letter of support for S.Con.Res.25 can be found here]

It is imperative that the Trump tax reform plan is signed into law in 2017. The first step toward achieving this goal must be passage of a budget resolution. 

Without a budget resolution, Congress is unable to move forward with tax reform as almost every Senate Democrat has already ruled out supporting Trump’s tax reform plan. The only path forward is through budget reconciliation which avoids a Senate filibuster before moving to a regular order process that involves Committees of jurisdiction drafting legislative text. 

Support for this budget resolution should be viewed as support for the Trump tax reform plan. Opposition to the budget resolution equals opposition to tax reform.

All Senators should vote “YES” on the S.Con.Res.25, the FY ‘18 budget resolution.

The Trump Tax Reform Framework proposes tax cuts and simplification for individuals and businesses: 

-Consolidates the existing seven tax brackets into three (12%, 25%, 35%). 
-Doubles the standard deduction (The first $12,000 for individuals and $24,000 for families will not be taxed). 
-Expands the child tax credit so that families have more take home pay. 
-Simplifies the code by repealing unnecessary deductions and credits but preserves home mortgage and charitable deductions. 
-Repeals the death tax and AMT. 
-Reduces taxes on all businesses by 42 percent – The corporate tax rate is reduced to 20 percent, and the tax rate on pass-through entities is reduced to 25 percent. 
-Enacts 100 percent, full business expensing for at least five years to stimulate new investment in the economy. 
-Replaces the outdated worldwide system of taxation with a system of territoriality so that American businesses operating overseas can compete. 
-Allows trillions of dollars’ worth of after-tax income to come back to the U.S. to be reinvested in the economy after a one-time repatriation rate. 

 

 

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Ohio Issue 2 Is A Bad Deal for Taxpayers

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Posted by Margaret Mire on Tuesday, October 17th, 2017, 9:37 AM PERMALINK

As November 7th – Election Day – gets closer, more and more “Yes on Issue 2” mailers and commercials are circulating Ohio.

Of the many false claims Issue 2 supporters continue to make, one of the most egregious is that Issue 2 – which would tie the rate the state and state agencies pay for prescription medications to the rate paid by the Veterans Administration – would save Ohio taxpayers $400 million a year.

While forcefully lowering the price the state can pay for prescription medication may sound like it would save tax dollars, Ohioans should note that such claims ignore key facts, and that Issue 2 is more likely to have the opposite effect.

Indeed, those who claim Issue 2 would save the state money ridiculously assume Ohio does not currently receive any considerable prescription drug discounts when, in fact, it does. Competition in the industry incentivizes biopharmaceutical manufacturers to voluntarily offer the state lower prices for medication. However, should Issue 2 be implemented, experts predict that many of the low-rate agreements Ohio has in place would be destroyed, potentially running up Ohio’s prescription costs by tens of millions each year.

In addition, Ohio taxpayers should keep in mind that the administrative costs of Issue 2 are also likely to be much, much higher than Issue 2 proponents are anticipating. At this time, there are no plans as to how Issue 2 would be put in place, meaning the taxpayers of Ohio will have to foot the bill for consultants, lawyers, and rulemakers that will be hired for a very long time to help navigate the implementation process (on top of basic overhead costs).

Adding to this tax dollar snowball is Issue’s 2 Section G. Section G guarantees the hardworking taxpayers of Ohio will cover any and all costs to defend Issue 2, should (when) it face legal challenges and applies whether or not Issue 2 stands up in court. This dangerous clause, which sets a precedent for taxpayer funded trial lawyers, should be terrifying to all Ohioans, including those who misguidedly favor the rest of this destructive measure.

All facts considered, rather than saving money, Issue 2 is more likely to result in lawmakers taking funding from other programs in the state budget and possibly asking taxpayers to fork over even more of their paychecks. Issue 2 is a terrible deal for taxpayers and Ohioans would benefit greatly from rejecting it.  

Photo Credit: Graem Dawes

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Middle Class Families Are The Real Winners In The GOP Tax Plan

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Posted by Alex Hendrie on Monday, October 16th, 2017, 12:00 PM PERMALINK

This article originally appeared in TheHill.com

The unified Republican tax reform framework released last month cuts taxes and increases take-home pay for the middle class while simplifying the code for millions of American families.

First, the framework consolidates the existing seven tax brackets into three — 12 percent, 25 percent, and 35 percent, giving rate reduction to all.

In addition, the plan doubles the standard deduction to $24,000 for a family and $12,000 for individuals, meaning this amount is taxed at zero percent, a significant tax reduction for millions of Americans.

This reform represents drastic rate reduction for the 105 million Americans across the country who took the standard deduction in 2015, according to IRS data. More than seven million taxpayers in Florida, nine million taxpayers in Texas, and three million in Michigan and North Carolina benefit from this tax reduction. These numbers also understate the number of taxpayers who will benefit as the increased standard deduction becomes more attractive for taxpayers.

This is not the only reform in the framework that helps American families. The plan calls for expanding the child tax credit, benefiting more than 22 million families across the country that used this credit in 2015, including more than 500,000 families in New Jersey, 800,000 families in Ohio, and 2.7 million families in California.

Similarly, the repeal of the AMT gives tax relief to almost 4.5 million American families that paid the tax in 2015. More than half a million taxpayers in New York, 250,000 taxpayers in Texas and 166,000 taxpayers in Pennsylvania are hit by the AMT.

Clearly, there are millions of Americans that benefit from the Republican tax reform framework, even before considering other changes in the framework.

Despite this, the plan has been attacked by some who claim the plan doesn’t benefit American families. For instance, a report released by the liberal Tax Policy Center claims that middle-class families will see little if any tax relief, and many will face a tax increase.

However, this analysis fails to account for several factors. First, it assumes many specific details such as the income threshold for the consolidated tax brackets and the size of the child tax credit. For instance, the TPC report assumes a child tax credit of just $1,500, even though two advocates of the child tax credit, first daughter Ivanka Trump and Senator Marco Rubio, have proposed a child tax credit of $2,500.

Even using the biased assumptions of the TPC, the framework is a significant tax reduction for families, as noted by Ryan Ellis writing for Forbes. After modeling three median income American families, Ellis found that each one came out better off from the GOP framework than they currently are.

The TPC study also fails to use any kind of dynamic scoring in its analysis. In large part, the tax reform framework is a jobs bill and many of the reforms to business taxes, like lower competitive rates for businesses and implementation of 100 percent expensing, are aimed at creating new or better jobs for Americans and increasing take-home pay for families through stronger economic growth.

Without dynamic scoring, an analysis of the GOP tax framework is incomplete because it does not account for changes in behavior that result from tax changes. Dynamic scoring has increasingly become the norm as a more accurate way to measure tax changes. While it is far from perfect, dynamic scoring can properly account for changes, like a reduction of the corporate tax.

Many studies have concluded that around 75 percent (and possibly even more) of the corporate tax is borne by labor, meaning a reduction in this tax as the framework proposes, also benefits American workers.

In fact an analysis by the Tax Foundation estimates that going to a 20 percent corporate rate creates the equivalent of 641,000 jobs and boosts income by three percent, or almost $1,700 per family based on 2015 median income. Failing to use dynamic scoring, as the TPC study does, means that the true benefits of the Republican framework are obscured. Any true analysis of the tax plan’s effect on individuals needs to include the benefits business changes have to the economy.

By any measure, the middle class is the winner of this tax reform plan. Under the unified framework released last month, American families will see tax cuts, tax simplification, new or better jobs, and more take-home pay.

 

Alex Hendrie is the director of tax policy at Americans for Tax Reform, a nonprofit group that works to support limited government.

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Trump Takes Key Step Towards Fixing Obamacare

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Posted by Satyajeet Marar on Friday, October 13th, 2017, 5:08 PM PERMALINK

An Executive Order signed by President Trump aims to expand options and lower costs for Americans by potentially allowing citizens to purchase insurance across state lines. The move is a step towards reforming America’s costly and unsustainable Obamacare system, a system that has cost ordinary Americans and American businesses billions in unfair and oppressive taxes while delivering subpar services.

Under the new order, the Secretary of Labor is directed to consider expanded access to Association Healthcare Plans (AHPs).  Expanding AHPs potentially allowing businesses to band together across state lines to offer their employees better coverage at a cheaper price in a larger, more competitive market. This long-overdue measure is welcome relief for small businesses which have suffered since Obamacare became law in 2010, when over 59% of companies with 25-49 workers offered their workers healthcare coverage. That figure has since dropped drastically by 14% with the number of companies with 1-24 workers offering healthcare coverage similarly dropping by 12% to just 32% today.

Short-term limited duration insurance, or STLDI, will also expand under the order. These plans are not subject to costly Obamacare regulations and are typically much cheaper – just a third of the cost of the cheapest Obamacare plan with broad provider networks and coverage limits. An Obama administration rule limits these plans to a 3 month duration. Repealing this rule will allow millions of Americans to access these plans, delivering immense utility and benefits especially for people between jobs, people in rural areas where coverage networks are limited, people who missed Obamacare’s open enrollment period and those living in thousands of US counties where only a single insurer offers exchange plans. This is a timely step given that by 2018, 1,500 counties of half of all US counties are projected to have only a single insurer offering exchange plans – denying over 2.6 million Americans a choice of insurer.

Finally, the order will aims to expand Healthcare Reimbursement Arrangements. HRAs are non-taxed, employer-funded accounts that reimburse workers for healthcare expenses including co-payments and deductibles. This will put power and control in the hands of millions of Americans who can seek flexible options tailored to their individual healthcare needs. HRAs were once popular among small businesses prior to draconian Obama-era regulations which restricted their use for insurance premiums.

The order is a welcome step against oppressive and costly Obamacare policy and taxes. Average premiums for individual health insurance plans have doubled between 2013 and 2017 and every state in the country using healthcare.gov has seen premiums rise, taking money out of the pockets of ordinary Americans.

Americans also continue to suffer from a swathe of shameless and corrosive Obamacare taxes including Health Savings Account taxes, individual mandate tax, high medical bills tax, health plan tax and even a tax on wheelchairs. The Health Insurance tax hits companies and is invariably passed on to consumers and firms, set to strip $130 billion over 10 years. Families seeking to manage their children’s healthcare needs through a pre-tax Flexible Savings Account face a tax if they exceed the low cap of $2,500. Other taxes are even more absurd – the tanning salon tax singles out these small businesses and has led to the closure of 10,000 tanning salons. A majority of tanning salons are owned by female entrepreneurs. Repealing these taxes will take a heavy and unfair burden off the shoulders of middle-class Americans and the firms who employ them.  

In return for paying these taxes, we’ve received a substandard healthcare system which affords citizens few options and has seen millions of Americans departing Obamacare exchanges whilst copping a hefty legal penalty instead. Over 6.7 million people left Obamacare in 2015 alone. Current exchange enrollment is 60% below what the Congressional Budget Office predicted when the law took effect and 500,000 fewer Americans have enrolled in an Obamacare this year compared to 2016. In a particularly unconscionable state of affairs, over 37% of the households penalized for leaving Obamacare in 2015 made less than $25,000 a year and a whopping 79%  made less than $50,000.

The evidence is clear that oppressive Obamacare policy and the taxes that fund it are hurting the poor, middle-class and those who deserve it the least. Though a welcome step, the Executive Order does not direct the agencies to adopt any particular rules but asks the agencies to consider expanding access to AHPs, STLDI, and HRAs to the extent consistent with law. A full repeal and replacement is the only solution for an unfair and broken system and it is time for congress and the senate to act.

 

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Friday the 13th Could be the Scariest Day of the Year for Connecticut Taxpayers

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Posted by Americans for Tax Reform on Thursday, October 12th, 2017, 3:26 PM PERMALINK

After being hit with the two largest tax increases in state history, this pre-Halloween Friday the 13th could bring even more bad luck and horrific tax hikes for Nutmeg State taxpayers.

Over 100 days into the new fiscal year, Gov. Malloy and state legislators are still struggling to reach a budget agreement. The sticking point is whether the new budget will be balanced on the backs of Connecticut taxpayers once again. Even after admitting earlier this year that his previous tax increases have not worked, Malloy continues to insist that further tax hikes be included in the new budget. 

Last month, lawmakers in Hartford passed a bipartisan budget proposal that did not include higher taxes and sent it to Gov. Malloy’s desk, where it was met with a veto. Unfortunately for Connecticut taxpayers, who already face the second highest state and local tax burden in the nation, Malloy is insisting on a new spending plan that raises taxes, even though legislators from both parties have shown the budget can be balanced without another round of job-killing tax hikes.

Connecticut lawmakers are now back at the negotiating table, working on a new budget deal that they hope to have ready by Friday, October 13th. As negotiations continue this week, the new version of the bipartisan budget could potentially include some of the tax hikes that Gov. Malloy has been pushing for all year, the most notable of which include higher taxes on prescription drugs, cellphone bills, hospitals, hotel rooms, vacation homes, and tobacco. Malloy has also proposed raising the state sales tax to 6.5% from 6.35% and the tax on restaurant meals to 7%.  

In addition to the two largest tax hikes in state history, Connecticut residents have also been hit with 20 federal Obamacare tax increases in recent years. The last thing they need is to have lawmakers in Hartford pile on with another round of job-crushing tax increases. Connecticut already has a tax climate that is hostile to business and the tax increases being pushed by Malloy will only make matters worse, likely exacerbating the exodus of individuals, families, and employers out of state. Americans for Tax Reform urges Connecticut legislators to stand up to Gov. Malloy (D) and thwart his incessant pursuit of more economy-depressing tax hikes.  

Photo Credit: CT Senate Democrats


Trump’s Tax Cut Plan Provides Much Needed Simplification for the American Taxpayer

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Posted by Douglas Ammerman on Thursday, October 12th, 2017, 2:03 PM PERMALINK

Editor's Note: Enjoy this guest post from an author all too familiar with America’s broken tax code.

Congress has an unprecedented opportunity to get something done that benefits everyone. Reforming our broken tax system is a mandate that transcends traditional political alliances. The first step toward true reform is simplification of our overly complex and burdensome tax code.

During my 30-year career in public accounting, my primary responsibility was assisting clients with their income tax filing requirements. The tax code has grown so complex, I found it was not uncommon for individuals to get conflicting advice from different tax professionals.

When the Internal Revenue Code was first created in 1913, the entire text of the Sixteenth Amendment and the Revenue Act totaled a mere 27 pages. Today, taxpayers are challenged by almost 75,000 pages of the Code and related Regulations.

Over the years, the complexity of our tax laws has grown at an exponential pace. Congress has made more than 5,900 changes to the code just since 2001.

Congress has created a labyrinth that is so replete with special interest exceptions, deductions, and allowances, that almost every taxpayer is forced to pay accountants to assist them with their filing requirements. According to the Taxpayer Advocate Service, 94 percent of individuals used a preparer or tax software to submit their returns.

In fiscal year 2016, the IRS received 104 million calls seeking guidance. It was only able to answer 53 percent of calls received, compared to 87 percent in 2004. In those instances where they did answer the phone, the Internal Revenue Service employees in call centers were apt to provide inaccurate and inconsistent advice. In fact, the IRS itself and court cases state that you cannot rely on the advice given by IRS employees!

The burden on taxpayers is overwhelming.

President Trump pointed out that over 6 billion hours are wasted every year in tax preparation compliance. The IRS instructions estimate the time required for one form alone takes 42 hours of record keeping, 5 hours of learning the law, 7 hours of preparation and 15 minutes to send to the IRS. This may sound outrageous, but in practice it takes even longer than the IRS estimate.

The individual income tax generates 2.6 billion hours of paperwork from roughly 150 million tax filers. This equates to 17 hours per response, or roughly two workdays dedicated to tax returns. Additionally, the tax preparation costs are enormous.

Families shouldn’t need professional help to file their tax returns. Making the tax code simple, fair, and easy to understand means getting rid of the loopholes, deductions, and carve-outs written by lobbyists. (As a side note, do we really need 4,000 tax lobbyists in Washington?) Under the president’s proposed framework, Americans will be able to file their taxes on a single piece of paper.

President Trump has clearly shown us how his tax reform framework will achieve long-overdue simplification—and greatly reduce the time, money, and headaches that come with our oppressive tax code. His plan is the right plan for Americans. Now it’s time for the rest of our leaders to step up. Tax simplification should be an immediate common objective of every single member of Congress.

This isn’t about Democrats or Republicans. We have a tax system that is inherently flawed and broken. If we want to renew our prosperity, restore opportunity, and reestablish our economic dominance, we need tax reform that is pro-growth, pro-jobs, pro-worker, pro-family, and pro-American—and it all starts with simplification.

Douglas Ammerman serves on the Board of Directors of America First Policies. He was a Partner of KPMG LLP from 1984 to 2002, where he represented numerous restaurant companies and headed KPMG’s high-wealth practice. Mr. Ammerman holds a Master's in Business Taxation from the University of Southern California.

Photo Credit: Gage Skidmore

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Norquist: GOP Death Tax Repeal is Pro-Growth, Pro-Jobs, and Pro-Competition

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Posted by Toni-Anne Barry on Thursday, October 12th, 2017, 1:00 PM PERMALINK

Today, ATR president Grover Norquist appeared as a panelist for the 60 Plus Association’s event on Death Tax repeal. Norquist spoke about the importance of permanent Death Tax repeal in the GOP tax reform framework, arguing that the tax hinders the economy as well as future economic growth and job creation.

He noted that repealing the Death Tax is another crucial factor in boosting international competition along with reducing business and corporate tax rate.

Using statistics gathered by the Tax Foundation, Norquist stated, “Abolishing the Death Tax would increase the economy by eight tenths of a point, almost a point 1 percent increase, and 159,000 full time jobs would be added.”

Panelists also included Death Tax experts such as: Jim Martin, Chairman and President of the 60 Plus Association, Karen Kerrigan, President and CEO of the Small Business & Entrepreneurship Council and Palmer Schoening, Founder and Chairman of the Family Business Coalition.

The Death Tax originated in 1797 to increase funding for naval expansion before being repealed shortly after in 1802. The tax would not be seen again until 1862 to pay for Civil War efforts. It would once again be repealed, but the tax would continue to follow this pattern, being implemented in 1898 and 1916 to help pay for the Spanish-American War and World War I respectively.

While the tax was repealed less than five years after its implementation during the Spanish-American War, it has never been repealed again. The tax has remained in our tax code for over a century, since 1916.

It is time to abolish the Death Tax. Permanently. The GOP tax reform plan achieves this.

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Norquist Praises Trump Tax Cut Plan as Huge Help To Truckers

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Posted by Americans for Tax Reform on Wednesday, October 11th, 2017, 5:13 PM PERMALINK

Ahead of President Trump’s tax reform rally in Pennsylvania with truckers, ATR president Grover Norquist praised the GOP plan as a huge benefit to small businesses and pass-through companies. Such businesses will see a 42% tax rate cut.

Norquist discussed the pass-through rate with Fox Business Network host David Asman, the host of After the Bell:

Norquist: “The 30 million Americans who have small businesses – self-employment income, pass-through income -- they will all benefit because their business tax rate goes down as well.”

David Asman, host: “That’s who the President is appealing to with the truckers today. Because the truckers mostly are these pass-through kind of companies. Working class Americans that have a little business of their own which is a trucking business and that represents as you say 30 million Americans. That’s a strong lobbying force.”

Norquist: Many of them are married, they’ve got spouses, they have children, they have brothers and sisters and employees. That is a huge number. Half of Americans work for pass-throughs, half for corporations. And that group has been ignored going back the last thirty years. We haven’t focused on entrepreneurs and bringing those tax rates down.”

Photo Credit: Darren Thompson

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Norquist Calls Out Schumer for Lying About Tax Reform

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Posted by Abigail Marone on Wednesday, October 11th, 2017, 2:44 PM PERMALINK

Today ATR president Grover Norquist called out Sen. Chuck Schumer (D-N.Y.) for lying about tax reform.

As a guest on Fox News Channel’s Fox & Friends, Norquist hit back at Schumer’s knowingly false assertion that the “bottom rate on working class families goes up” under the GOP tax cut plan.

Norquist said:

“Schumer is lying. There are eight rates now, they’re going to go down to four. The bottom rate is zero -- the 10% rate goes down to zero --  the 15% rate goes down to 12%. All of the rates go down, so there will be 0%, 12%, 25%, 35%. Everybody who pays taxes sees lower rates. The game that Schumer is playing, is he pretends there isn’t a zero rate but there is and it is expanded under the Trump-Republican plan. It’s very dishonest, and what it does tell you is that Schumer is not going to play any role in working with the Republicans in Congress or the White House to play any role in tax reform. I didn’t expect him to, but this kind of dishonesty explains that he’s not even part of the discussion.”

Schumer’s lying is especially rich given that his candidate, Hillary Clinton, offered NO income tax rate reduction for ANY American of any income level. 

Photo Credit: Gage Skidmore


Chicago Repeals Soda Tax

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Posted by Patrick Gleason on Wednesday, October 11th, 2017, 2:33 PM PERMALINK

In a blow to Michael Bloomberg’s nanny-state crusade, the Cook County Board today voted to abolish Chicago’s hated pop tax.

Cook County was the largest municipality in the U.S. to levy a soda tax. The one-cent per ounce soda tax, which went into effect in August, required a rare tie-breaking vote from Cook County Board President Toni Preckwinkle, the top champion of that regressive tax hike, in order to receive final passage back in November of 2016.

After a fierce public backlash against the tax, the board repealed the tax today by a vote of 15 -1. The soda tax was a top priority of former New York City mayor Bloomberg. He dumped $5 million into a pro-soda-tax campaign in the county.

This is the second recent major defeat for Bloomberg. Santa Fe voters overwhelmingly rejected a ballot measure that would have imposed a soda tax in that city.

"If there is one city America’s tax and spenders should be able muscle through the latest tax fad, it would be Chicago. And yet in this tax and spend, Democrat-run city, consumers forced the city council to cough up their recent tax hike and repeal the soda tax,” said Grover Norquist, president of Americans for Tax Reform. “This is huge victory for consumers and taxpayers and demonstrates to the world that there is a limit to the burden taxpayers will carry—even in Chicago.”

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