Tax Hikes

Facts That Demand Tax Reform

Happy Tax Day! Well, not really. Let’s not kid ourselves — we all dread April 15th. What is usually a lovely spring day has turned into a huge inconvenience as we all rush to get our taxes filed to keep the Internal Revenue Service off our backs.

The tax code is complicated. Americans spend 6.6 billion hours each year filing out tax forms and $163 billion in compliance costs. Unfortunately, the tax code has been made more complicated by politicians and bureaucrats who meddle with it on a daily basis. That’s not an exaggeration either. According to recent report from Bloomberg, the tax code has been altered 4,680 times since 2001 — more than once a day:

It started as 30 words. One hundred years later, it’s almost 4 million.

The 16th Amendment to the U.S. Constitution, which created the federal income tax, and the millions of words in the tax code today provide symbolic data points marking the evolution of a simple concept into a convoluted reality.

The statistics on the burden imposed by the byzantine tax code get wide circulation every year at this time:
Americans spend more than 6.1 billion hours and $168 billion complying with the tax code;

Most Americans hire a professional (60 percent) or use tax- preparation software (30 percent);

The tax code has had 4,680 changes since 2001, more than one a day.

Top Ten Tax Hikes in the Obama Budget

Written by Ryan Ellis, Tax Policy Director at Americans for Tax Reform. Posted with permission from Americans for Tax Reform.

What are the top ten tax hikes in President Obama’s new budget?

There are literally dozens of new tax increases in the FY 2014 Obama budget.  In total, they increase taxes by nearly $1 trillion over the next decade.  They would permanently bring the federal tax burden to 20 percent of economic output, a level only reached in one year since World War II (FY 2000, when the economy was roaring and tax revenues were pouring into Washington as a result).

Below are the top ten tax increases in President Obama’s budget (all numbers are over a decade):

1. Chained CPI. The budget would change the definition of inflation for all federal budget purposes, including federal tax provisions.  Because tax brackets and other tax items are indexed to inflation, slowing down their growth is an income tax increase.  This is a tax increase for all Americans who pay income tax, including middle class Americans.  In the past, Congress’ Joint Committee on Taxation has estimated that enacted “chained CPI” would be a $100 billion tax increase

Obama’s New Budget is Not a Compromise

The new narrative being pushed by the media is that President Barack Obama’s new budget is an olive branch of sorts to congressional Republicans. Politico ran with the headline, “President Obama’s risky ‘goodwill’ gambit,” which highlighted some of the proposed changes to Social Security.

The Associated Press noted the frustration from some on the Left in its piece, “Liberals balk at Obama’s 2nd term overtures to GOP,” which also focused on the proposed cuts to entitlement programs.

While it’s true that the only real measure of good news from the the White House’s budget is the changes to Social Security, there is absolutely nothing here in terms of compromise or reform. The White House has made that much clear by telling Politico — in a separate article from the one mentioned above, of course — that Republicans can take the Social Security changes in exchange for more $1 trillion in tax hikes or leave it:

And Gene Sperling, the director Obama’s National Economic Council, on Wednesday afternoon emphasized that the proposal is ”not an à la carte menu” for Speaker John Boehner (R-Ohio) and congressional Republicans to choose what they like and discard the rest.

“You can’t decide to only pick out the concessions the president has made and not include the concessions from the Republican side that need to be part of a bipartisan deal that can pass both houses,” Sperling said.

Obama’s Budget Means More Tax Hikes

You mad, bro?

After a two-month delay and missing a legally-required deadline, President Barack Obama finally unveiled his budget for FY 2014. The spending plan is, unfortunately, just more of the same from this president:

President Obama’s 2014 budget calls for a trillion dollars in new taxes, almost twice as much as previously thought, The Washington Examiner has learned.

“Of the more than $1 trillion in new taxes, about $800 billion is raised through the individual income tax system, about $125 billion comes from new excise taxes — including new taxes on tobacco and financial companies,” a source familiar with the president’s budget explained. “The remainder comes from reverting back to the 2009 estate tax parameters and other miscellaneous tax increases.”

Despite the talk of deficit reduction, President Obama’s budget doesn’t substantially reduce spending and will never balance. The only constant in is the same, old class warfare rhetoric.

White House confirms: Obama Budget Contains Middle Class Income Tax Hike

Written by John Kartch and Ryan Ellis of Americans for Tax Reform. Posted with permission from Americans for Tax Reform.

White House spokesman Jay Carney “not disputing” Obama budget would “raise taxes on middle class Americans.”

During a Friday, April 5 White House press briefing, spokesman Jay Carney replied “I’m not disputing that” when asked if a particular Obama budget proposal would raise income taxes on the middle class.

The proposal in question is known as “Chained CPI.” The term is a Beltway euphemism for measuring inflation at a different, slower pace.  Many tax and budget items are indexed to inflation, so slowing inflation’s measured rate of growth has both spending cut and tax increase implications.

On the tax side, all income tax brackets are subject to inflation.  Slowing down the inflation rate slows down the annual rate of growth in all income tax brackets.

This means the Obama budget contains a tax increase on 100 percent of middle class taxpayers—anyone who pays the federal income tax.

Many other tax provisions—the standard deduction, the personal exemption, PEP and Pease, IRA and 401(k) contribution limits, and many others—are also tied to how CPI is measured.

Chained CPI as a stand-alone measure (that is, not paired with tax relief of equal or greater size) is a tax increase and a Taxpayer Protection Pledge violation. Various reports peg the tax increase amount as exceeding $100 billion over the next decade.

Video of the press briefing exchange can be found here.

Obama Targets Private Retirement Accounts

Barack Obama

The White House has finally rolled out its budget proposal for the upcoming fiscal year. While there has been a lot about the proposed cuts to entitlement programs, President Obama’s budget unsurprisingly pushes tax hikes, including proposed changes to retirement accounts, as Politico noted last week:

The budget will also show how we can provide targeted tax relief to strengthen the economy, help middle class families and small businesses and pay for it by eliminating tax loopholes and make the tax system more fair.  The budget will include a new proposal that prohibits individuals from accumulating over $3 million in IRAs and other tax-preferred retirement accounts.  Under current rules, some wealthy individuals are able to accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving. The budget would limit an individual’s total balance across tax-preferred accounts to an amount sufficient to finance an annuity of not more than $205,000 per year in retirement, or about $3 million in 2013. This proposal would raise $9 billion over 10 years.

With Social Security anything but guaranteed given its unfunded liabilities, many Americans are relying on their private retirement accounts to help get them through their golden years. This is, after all, part of the American Dream. But it apparently doesn’t fit the America that President Obama has been trying so hard to re-create since taking office in 2009.

Louisiana Democrat Dares Republicans to Challenge Her in 2014

Mary Landrieu and Barack Obama

While they face tough odds to take control of the Senate next year, Republicans will no doubt set their sights on Sen. Mary Landrieu (D-LA) and she’s giving them plenty of ammunition to use in what could be an expensive, heated campaign.

In an interview with Politico, Landrieu stood behind her record and even suggested that she could support President Barack Obama’s gun control proposals, which will come before the Senate next month:

The Louisianian confidently voted last week for the Democratic budget with its $1 trillion in tax hikes. She was one of only 20 Democrats who favored keeping the medical device tax, an element of Obamacare that some Democrats have worked to abolish. Along with other Democrats, she backed a handful of amendments opposed by senators from conservative states restricting health care for immigrants and politically charged language to curb a cellphone assistance program.

“I do not scare easily,” Landrieu told POLITICO. “I think it’s in my DNA. I come from a family that feels very passionately and very strongly about public service and about trying to always find a balance and keep our eyes focused on representing the people and not getting too caught up in the politics of the day.”

Republicans Won on Spending in Spite of Their Poor Message

boehner

House Republicans are claiming a victory on spending over President Barack Obama. According to a memo sent to his caucus, Speaker John Boehner said that their “new tactical plan” was a success:

Speaker John Boehner (R-Ohio) hailed his conference’s success against President Obama in a memo issued to Republicans on Thursday.

Boehner said the House GOP’s “new tactical plan” to fight Obama and Democrats on spending had largely succeeded, and sought input from his rank-and-file on where to go from here.

“Republicans may be the minority party in Washington — but because we forged a plan together and have stuck to it, our actions as a team over the past couple of months have made a difference for all Americans,” Boehner wrote.

The Speaker highlighted as a success legislation that would have withheld pay from the House and Senate if either chamber did not produce a budget. He also complimented House Majority Leader Eric Cantor’s (R-Va.) “make life work” initiative, which is meant to showcase GOP ideas that will help working families.

“From #NoBudgetNoPay to Leader Cantor’s #MakingLifeWork initiative to last week’s passage of our Path to Prosperity budget, we’ve used our limited power in Washington to maximum effect, and shown the Democratic majority what leadership looks like,” Boehner wrote.

SC-01: Poll Shows GOP Candidates in Tight Race

Colbert Busch

No matter who the Republican nominee is in South Carolina’s First Congressional District, they will have a tough match-up when they face Elizabeth Colbert Busch, who won the Democratic primary last week.

According to a new survey released yesterday by Public Policy Polling, both Mark Sanford and Curtis Bostic, both of whom are vying for the GOP nomination, are in a virtual tie with Busch, the sister of comedian Stephen Colbert.

As far as the Republican runoff goes, Sanford looks to have it in the bag, though he can’t take anything for granted. Public Policy Polling notes that Sanford leads Bostic by a 13-point margin, 53/40. That’s a tough hurdle to overcome with just six days to go. However, neither Republican candidate is overwhelming Busch.

Elizabeth Colbert Busch v. Mark Sanford

  • Busch (D): 47%
  • Sanford (R): 45%
  • Undecided: 8%

Elizabeth Colbert Busch v. Curtis Bostic

  • Busch (D): 43%
  • Bostic (R): 43%
  • Undecided: 14%

Neither Republican candidate is viewed favorably by voters in the district. Bostic is at 30/42, though 28% have no opinion of him. Sanford’s underwater favorability — 34/58 — is really dragging him down.

GOP Could Gain South Dakota Senate Seat in 2014

Tim Johnson

Republicans had their sights set on the Senate seat in South Dakota in 2014, but they may have been handed some help. Sen. Tim Johnson (D-SD), who has served in the chamber since 1997, has announced his retirement:

Sen. Tim Johnson (D-S.D.) will not seek reelection in 2014, The Hill has confirmed, putting another red-state seat up for grabs in the battle for control of the Senate.

Johnson, who is serving his third term, will announce the news on Tuesday at the University of South Dakota, his former school. Johnson will be the fifth Senate Democrat to retire this election cycle.

The decision gives Republicans another prime pickup opportunity as they work to win back control of the Senate.

Republicans need to gain six seats to flip control of the upper chamber in 2014. Mitt Romney carried South Dakota with 57 percent of the vote in the 2012 presidential election.


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