The Tax Bill Passed Last Night

This is the summary from Thomas.gov of the tax bill that passed the Senate last night.

H.R.1 — 115th Congress (2017-2018)

Introduced in House (11/02/2017)

Tax Cuts and Jobs Act

This bill amends the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses.

With respect to individuals, the bill:

  • replaces the seven existing tax brackets (10%, 15%, 25%, 28%, 33%, 35%, and 39.6%) with four brackets (12%, 25%, 35%, and 39.6%),
  • increases the standard deduction,
  • repeals the deduction for personal exemptions,
  • establishes a 25% maximum rate on the business income of individuals,
  • increases the child tax credit and establishes a new family tax credit,
  • repeals the overall limitation on certain itemized deductions,
  • limits the mortgage interest deduction for debt incurred after November 2, 2017, to mortgages of up to $500,000 (currently $1 million),
  • repeals the deduction for state and local income or sales taxes not paid or accrued in a trade or business,
  • repeals the deduction for medical expenses,
  • consolidates and repeals several education-related deductions and credits,
  • repeals the alternative minimum tax, and
  • repeals the estate and generation-skipping transfer taxes in six years.

For businesses, the bill:

  • reduces the corporate tax rate from a maximum of 35% to a flat 20% rate (25% for personal services corporations),
  • allows increased expensing of the costs of certain property,
  • limits the deductibility of net interest expenses to 30% of the business’s adjusted taxable income,
  • repeals the work opportunity tax credit,
  • terminates the exclusion for interest on private activity bonds,
  • modifies or repeals various energy-related deductions and credits,
  • modifies the taxation of foreign income, and
  • imposes an excise tax on certain payments from domestic corporations to related foreign corporations.

The bill also repeals or modifies several additional credits and deductions for individuals and businesses.

Do We Really Want To Do This?

Yesterday Breitbart.com posted a story about the cost of President Obama’s executive order on amnesty. This executive order has major consequences.

The article reports:

The lifetime costs of Social Security and Medicare benefits of illegal immigrant beneficiaries of President Obama’s executive amnesty would be well over a trillion dollars, according to Heritage Foundation expert Robert Rector’s prepared testimony for a House panel obtained in advance by Breitbart News.

Rector, a senior research fellow at Heritage, is slated to speak on the costs of Obama’s executive amnesty Tuesday before the House Oversight and Government Reform Committee. He will testify to the high entitlement costs of granting legal status to millions of illegal immigrants.

Based on Rector’s calculations, which assume that at least 3.97 illegal immigrants would apply for and receive legal status under Deferred Action for Parents of U.S. citizens and legal permanent residents (DAPA), and that the average DAPA beneficiary would have a 10th grade education, the costs would be immense.

Specifically, in 2010 dollars, the lifetime costs of Social Security benefits to DAPA beneficiaries would be about $1.3 trillion.

This would be a problem for the federal government.

The article also calculates the cost of welfare benefits to the new immigrants.

The article explains:

“On average, the combined cost of means-tested welfare benefits currently received, the EITC and ACTC cash, and potential Obamacare benefits would come to $17,800 per year per DAPA family,” Rector’s testimony reads. “The aggregate cost would be over $35 billion per year.”

In terms of what DAPA eligible individuals would contribute in tax payments once they are “on the books,” Rector estimates that “Federal Insurance Contribution Act (FICA) and federal income tax revenues would increase by about $7.2 billion per year.”

As you watch the fight for executive amnesty unfold, you might want to add the Cloward Piven Strategy to your list of possible explanations for this fight.

TeaPartyInTheHills defines Cloward Piven as follows:

The strategy was first proposed in 1966 by Columbia University political scientists Richard Andrew Cloward and Frances Fox Piven as a plan to bankrupt the welfare system and produce radical change. Sometimes known as the “crisis strategy” or the the “flood-the-rolls, bankrupt-the-cities strategy,” the Cloward-Piven approach called for swamping the welfare rolls with new applicants – more than the system could bear. It was hoped that the resulting economic collapse would lead to political turmoil and ultimately socialism.

The National Welfare Rights Organization (NWRO), founded by African-American militant George Alvin Wiley, put the Cloward-Piven strategy to work in the streets. Its activities led directly to the welfare crisis that bankrupted New York City in 1975.

Veterans of NWRO went on to found the Living Wage Movement and the Voting Rights Movement, both of which rely on the Cloward-Piven strategy and both of which are spear-headed by the radical cult ACORN.

Both the Living Wage and Voting Rights movements depend heavily on financial support from George Soros‘s Open Society Institute.

 Something to consider.

 

 

Please Remember This In November

On Friday the Washington Free Beacon reported that Senate Democrats on Thursday blocked a Republican attempt to restore military pensions cut in last month’s budget deal. The Democrats denied a vote on an amendment that would have ended the loophole that allows illegal aliens to obtain millions in tax refunds and restored the cuts to military pensions.

The article reports:

Among them (the Republican Amendments)  was Ayotte’s (Sen. Kelly Ayotte R., N.H.) measure, which would repeal cuts to military pensions by ending a loophole in the tax code that allows illegal immigrants to receive the Additional Child Tax Credit. Her attempt to get a vote failed 42-54, with only one Democrat, Sen. Joe Manchin (W.Va.), voting with Republicans.

“It’s a sad day when a common sense amendment to responsibly pay for legislation that helps struggling Americans, repeals unfair military retirement benefits and reduces the deficit can’t even get a vote in the Senate,” Ayotte said in a statement.

The amendment would have repealed a provision in the budget deal that hits military retirees with a 1 percent decrease in their annual cost-of-living adjustments (COLA), which could cost servicemembers up to $124,000 in lost retirement pay. Federal civilian retiree pensions were not cut.

The budget agreement also did not exempt disabled military retirees despite early assurances from the House Budget Committee. The cuts will save an estimated $6 billion over 10 years.

There were no cuts made to the pensions of either Congress or civil service employees. Civil servants have unions–the military does not. Cutting military retirement pay is a disgrace.

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It Really Is About Priorities

I have spent some time in the past week ranting about the cuts to the military pensions included in the budget deal. Every day the news about the deal seems to get a little worse. Today is no exception.

John Hinderaker posted an article at Power Line yesterday about another aspect of the budget compromise the Senate will be voting on in the next day or so.

The article explains one aspect of the budget negotiations in the Senate:

Harry Reid runs the Senate with an autocratic hand. One of his favorite tricks is called “filling the tree.” Reid will offer a series of amendments to legislation that “fill the tree,” making it impossible for any Republican amendments to be offered. In this way, Reid prevents Republicans from having any input into legislation and spares Democrats from having to vote against popular Republican initiatives.

Today, Reid filled the amendment tree on the Ryan-Murray budget to foreclose further amendments. Sessions wanted to propose an amendment to the spending bill that would delete the veterans’ benefit cuts and replace them by closing a loophole that allows illegal immigrants to suck billions of dollars out of the treasury.

So what is this loophole and how much does it cost? There is something called the Additional Child Tax Credit (ACTC). I have written about the ACTC before–rightwinggranny.com and rightwinggranny.com.  A person does not need to have a social security number or pay income taxes in order to receive money under this program. This program is known to be a source of income for people who are in America illegally.

The article reports:

According to a 2011 report by the Treasury Inspector General for Tax Administration, millions of people without valid Social Security numbers received a total of $4.2 billion in ACTC in 2010 – up from $924 million in 2005. The IRS is expected to issue some $7.4 billion in ACTC payouts this year.

The article concludes:

In order to allow his amendment to be heard, Sessions offered a tabling amendment to get rid of the filled amendment tree. That would have cleared the way for his amendment to be voted on, but the Democrats closed ranks on behalf of illegal immigrants and defeated Sessions’ motion on a nearly straight party line vote. The only Democrat to vote for the motion was Kay Hagan, who is up for re-election next year and evidently didn’t want to have to explain a “no” vote to her constituents.

Prioritizing illegal aliens over military veterans: that tells you all you need to know about the Democratic Party.

It is time to replace every current Congressmen who voted to defeat Jeff Sessions‘ motion. It is a disgrace that Congress would give money to people who are in America illegally before they would honor the promise America made to its soldiers when those soldiers enlisted.

 

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It’s The Spending–Not The Taxes

On Friday Representative Darrell Issa posted an editorial in the Washington Times about the current fiscal cliff debate in Washington.

He begins the article with some recent history on American tax policy:

Twenty-six years ago, President Reagan implemented significant tax reforms that lowered the individual income tax rate, limited deductions and brought equality to tax rates across all levels. Before that reform, there had been 15 different marginal tax rates reaching levels as high as 50 percent for top brackets. By the time Reagan left office, the number of brackets had been reduced to two: 15 percent and 28 percent.

In 1993, President Clinton raised the top two income rates to 36 percent and 39.6 percent while also raising the corporate tax rate, increasing the taxable portion of Social Security benefits and increasing income taxable for Medicare. This is what has become known as the “Clinton tax rates.”

In 2001, President George W. Bush changed the rate from 39.6 percent to 35 percent, lowered the capital gains and dividend income rates, and expanded credits and deductions such as the Child Tax Credit and the Earned Income Tax Credit.

The current discussions in Congress are centered on the idea of raising taxes–not on cutting spending. What would be the impact of raising taxes on the rich?

Representative Issa points out:

If you raised taxes on the top income bracket, you would generate around $1 trillion over 10 years. The past four years under President Obama have resulted in trillion-dollar deficits each year. At this rate, in 10 years we’re looking at $10 trillion in new debt. At best, the “tax-the-rich” proposal is just a 10 percent solution.

Government spending has traditionally been about 18 to 20 percent of America’s Gross Domestic Product (GDP). Under President Obama, it has been about 24%. Since tax revenue is about 18% of GDP for year, the source of the deficit is obvious. Even when taxes are raised, tax revenue remains about 18% of GDP.

Representative Issa concludes:

The other side tries to boil this down into a seven-second sound bite about taxing the rich and people paying their fair share. In 2009, the top 10 percent of earners in the United States already paid more than 70 percent of federal income taxes.

This isn’t about fairness and unfairness. It’s about taxing and spending, and the federal government has spent enough.

The federal government collects more tax money from all Americans than the Medieval lords collected from the serfs. It really is time for that to stop.

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About That Tax Policy Thing…

Yesterday wthr.com, an Indiana television station, posted an article about a tax loophole that it costing Americans billions of dollars–it doesn’t involve ‘evil’ corporations or the ‘evil’ rich–it involves a simple IRS tax policy toward legal and illegal aliens who are working in America.

Please watch the video at the link above to hear the entire story. Essentially what is happening is that non-Americans who are working in America are issued an ITIN, an individual taxpayer identification number. A 9-digit ITIN number issued by the IRS provides both resident and nonresident aliens with a unique identification number that allows them to file tax returns. This number is issued to both legal and illegal aliens.

The article reports:

Each spring, at tax preparation offices all across the nation, many illegal immigrants are now eagerly filing tax returns to take advantage of a tax loophole, using their ITIN numbers to get huge refunds from the IRS.

The loophole is called the Additional Child Tax Credit. It’s a fully-refundable credit of up to $1000 per child, and it’s meant to help working families who have children living at home.  

But 13 Investigates has found many undocumented workers are claiming the tax credit for kids who live in Mexico – lots of kids in Mexico.

“We’ve seen sometimes 10 or 12 dependents, most times nieces and nephews, on these tax forms,” the whistleblower told Eyewitness News. “The more you put on there, the more you get back.”

Some of the tax refunds generated by this practice have reached $30,000. I wonder if $30,000 was paid in taxes in the first place.

The article posted a statement from the IRS regarding this matter:

Full statement to WTHR from the Internal Revenue Service

The law has been clear for over a decade that eligibility for these credits does not depend on work authorization status or the type of taxpayer identification number used. Any suggestion that the IRS shouldn’t be paying out these credits under current law to ITIN holders is simply incorrect. The IRS administers the law impartially and applies it as it is written. If the law were changed, the IRS would change its programs accordingly. The IRS disagrees with TIGTA’s recommendation on requiring additional documentation to verify child credit claims. As TIGTA acknowledges in this report, the IRS does not currently have the legal authority to verify and disallow the Child Tax Credit and the Additional Child Tax Credit during return processing simply because of the lack of documentation. The IRS has procedures in place specifically for the evaluation of questionable credit claims early in the processing stream and prior to issuance of a refund. The IRS continues to work to refine and improve our processes.

Why do I have the feeling that if I start listing my nieces or nephews on my tax return, the IRS will pay me a visit?

 

 

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Something To Keep In Mind As We Discuss The Deficit

One of the problems with our deficit is that the government does not always spend money wisely. Occasionally they do, but as with any large organization, mistakes are made. We could cut some of our deficit simply by being more efficient and avoiding stupid mistakes. Speaking of stupid mistakes…

Hot Air is reporting today that illegal aliens not authorized to work in the United States collected $4.2 billion in tax refunds from the Internal Revenue Service. This number is the result of an audit by the Treasury Inspector General for Tax Administration (TIGTA). The article reports:

Many individuals who are not authorized to work in the United States, and thus not eligible to obtain a Social Security Number (SSN) for employment, earn income in the United States.  The Internal Revenue Service (IRS) provides such individuals with an Individual Taxpayer Identification Number (ITIN) to facilitate their filing of tax returns.  Although the law prohibits aliens residing without authorization in the United States from receiving most Federal public benefits, an increasing number of these individuals are filing tax returns claiming the Additional Child Tax Credit (ACTC), a refundable tax credit intended for working families.  The payment of Federal funds through this tax benefit appears to provide an additional incentive for aliens to enter, reside, and work in the United States without authorization, which contradicts Federal law and policy to remove such incentives.

The article goes on to explain that the IRS says it does not have the authority to deny the claims. I don’t mean to be difficult here, but shouldn’t Congress (or even President Obama) be doing something about this? Isn’t that their job?

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