Duncan Hunter on Tax Reform Republican Representative (CA-52)

FactCheck: Cost of IRS compliance is $150B,not $250B

We’re not sure where Hunter gets that figure. The President’s Advisory Panel on Tax Reform puts total compliance costs at around $140 billion per year, a figure that includes the value of individual taxpayer’s time spent filling out forms, which strictly speaking is not money “that we pay.” Add to that the “more than $10 billion” that the government spends to administer the tax system, and the figure comes to $150 billion, not $250 billion. The advisory panel report says other estimates of compliance costs fall between $100 billion and $200 billion.

The IRS and current tax system cost too much

Would be wrong to pledge never to raise taxes

A: I probably voted for more tax cuts than anybody here; but, I think it would be wrong to say, “Absolutely, I would pledge to Grover Norquist that I would never raise taxes.” Could have a national emergency.

Sponsored FairTax proposal

HUCKABEE: Nothing’s going to discourage Americans from spending money! No, the FairTax does something that is absolutely phenomenal for the economy. It untaxes productivity. It untaxes those things which we export.

HUNTER: I’m a sponsor of the FairTax.

Alternative minimum tax is creeping up & must be reformed

Voted NO on extending AMT exemptions to avoid hitting middle-income.

1. increase and extend through 2008 the alternative minimum tax (AMT) exemption amounts;
2. extend through 2008 the offset of personal tax credits against AMT tax liabilities;
3. treat net income and loss from an investment services partnership interest as ordinary income and loss;
4. deny major integrated oil companies a tax deduction for income attributable to domestic production of oil or gas.

The AMT sets a minimum tax rate of 26% or 28% on some taxpayers so that they cannot use certain types of deductions to lower their tax. By contrast, the rate for a corporation is 20%. Affected taxpayers are those who have what are known as "tax preference items". These include long-term capital gains, accelerated depreciation, & percentage depletion.

Because the AMT is not indexed to inflation, an increasing number of upper-middle-income taxpayers have been finding themselves subject to this tax. In 2006, an IRS report highlighted the AMT as the single most serious problem with the tax code.

For 2007, the AMT Exemption was not fully phased until [income reaches] $415,000 for joint returns. Within the $150,000 to $415,000 range, AMT liability typically increases as income increases above $150,000.

OnTheIssues.org Explanation: This vote extends the AMT exemption, and hence avoids the AMT affecting more upper-middle-income people. This vote has no permanent effect on the AMT, although voting YES implies that one would support the same permanent AMT change.

Voted YES on retaining reduced taxes on capital gains & dividends.

• Decreasing the number of people that will be required to pay the Alternative Minimum Tax (AMT)
• Allowing for deductions of state and local general sales taxes through 2007 instead of 2006
• Lengthening tax credits for research expenses
• Increasing the age limit for eligibility for food stamp recipients from 25 to 35 years
• Continuing reduced tax rates of 15% and 5% on capital gains and dividends through 2010
• Extending through 2007 the expense allowances for environmental remediation costs (the cost of cleanup of sites where petroleum products have been released or disposed)

Voted YES on providing tax relief and simplification.

• Extension of Family Tax Provisions
• Repeals the scheduled reduction (15 to 10 percent) for taxable years beginning before January 1, 2005, of the refundability of the child tax credit.
• Extends through 2005 the increased exemption from the alternative minimum tax for individual taxpayers.
• Extends through 2005 the following expiring tax provisions:
  1. the tax credit for increasing research activities;
  2. the work opportunity tax credit;
  3. the welfare-to-work tax credit;
  4. the authority for issuance of qualified zone academy bonds;
  5. the charitable deduction for donations by corporations of computer technology and equipment used for educational purposes;
  6. the tax deduction for certain expenses of elementary and secondary school teachers;
  7. the expensing of environmental remediation costs;
  8. the designation of a District of Columbia enterprise zone

Voted YES on making permanent an increase in the child tax credit.

Voted YES on permanently eliminating the marriage penalty.

Voted YES on making the Bush tax cuts permanent.

Voted YES on $99 B economic stimulus: capital gains & income tax cuts.

The bill would allow more individuals to receive immediate $300 refunds, and lower the capital gains tax rate from 20% to 18%.

Voted YES on Tax cut package of $958 B over 10 years.

Voted YES on eliminating the Estate Tax ("death tax").

Voted YES on eliminating the "marriage penalty".

Voted YES on $46 billion in tax cuts for small business.

Phaseout the death tax.

Title: To amend the Internal Revenue Code of 1986 to phaseout the estate and gift taxes over a 10-year period.

Summary: Repeals, effective January 1, 2011, current provisions relating to the basis of property acquired from a decedent. Provides with respect to property acquired from a decedent dying on January 1, 2011, or later that:
1. property shall be treated as transferred by gift; and

2. the basis of the person acquiring the property shall be the lesser of the adjusted basis of the decedent or the fair market value of the property at the date of the decedent's death.

3. Requires specified information to be reported concerning non-cash assets over $1.3 million transferred at death and certain gifts exceeding $25,000.

4. Makes the exclusion of gain on the sale of a principal residence available to heirs.

5. Revises current provisions concerning the transfer of farm real to provide that gain on such exchange shall be recognized to the estate only to the extent that the fair market value of such property exceeds such value on the date of death.

6. Provides a similar rule for certain trusts.

7. Amends the special rules for allocation of the generation-skipping tax (GST) exemption to provide that if any individual makes an indirect skip during such individual's lifetime, any unused portion of such individual's GST exemption shall be allocated to the property transferred to the extent necessary to make the inclusion ratio for such property zero; and

8. if the amount of the indirect skip exceeds such unused portion, the entire unused portion shall be allocated to the property transferred.

9. Provides that, if an allocation of the GST exemption to any transfers of property is deemed to have been made at the close of an estate tax inclusion period, the value of the property shall be its value at such time.

Rated 58% by NTU, indicating "Satisfactory" on tax votes.

Every year National Taxpayers Union (NTU) rates U.S. Representatives and Senators on their actual votes—every vote that significantly affects taxes, spending, debt, and regulatory burdens on consumers and taxpayers. NTU assigned weights to the votes, reflecting the importance of each vote’s effect. NTU has no partisan axe to grind. All Members of Congress are treated the same regardless of political affiliation. Our only constituency is the overburdened American taxpayer. Grades are given impartially, based on the Taxpayer Score. The Taxpayer Score measures the strength of support for reducing spending and regulation and opposing higher taxes. In general, a higher score is better because it means a Member of Congress voted to lessen or limit the burden on taxpayers. The Taxpayer Score can range between zero and 100. We do not expect anyone to score a 100, nor has any legislator ever scored a perfect 100 in the multi-year history of the comprehensive NTU scoring system. A high score does not mean that the Member of Congress was opposed to all spending or all programs. High-scoring Members have indicated that they would vote for many programs if the amount of spending were lower. A Member who wants to increase spending on some programs can achieve a high score if he or she votes for offsetting cuts in other programs. A zero score would indicate that the Member of Congress approved every spending proposal and opposed every pro-taxpayer reform.

Rated 0% by the CTJ, indicating opposition to progressive taxation.

OnTheIssues.org interprets the 2005-2006 CTJ scores as follows:

• 0% - 20%: opposes progressive taxation (approx. 235 members)
• 21% - 79%: mixed record on progressive taxation (approx. 39 members)
• 80%-100%: favors progressive taxation (approx. 190 members)

Citizens for Tax Justice, founded in 1979, is not-for-profit public interest research and advocacy organization focusing on federal, state and local tax policies and their impact upon our nation. CTJ's mission is to give ordinary people a greater voice in the development of tax laws. Against the armies of special interest lobbyists for corporations and the wealthy, CTJ fights for:

• Fair taxes for middle and low-income families
• Requiring the wealthy to pay their fair share
• Closing corporate tax loopholes
• Adequately funding important government services
• Reducing the federal debt
• Taxation that minimizes distortion of economic markets

Permanently repeal the estate tax.

Congressional Summary:

• H.R.143: Effective for estates of decedents dying after December 31, 2010, chapter 11 of subtitle B of the Internal Revenue Code of 1986 is repealed.
• H.R.177: Subtitle B of the Internal Revenue Code of 1986 (relating to estate, gift, and generation-skipping taxes) is hereby repealed.

OnTheIssues Explanation: At the end of 2010, the temporary one-year suspension of the estate tax ended. This bill proposes to make it permanent, with zero exemption. The "exemption" means the amount one can inherit without taxation. In 2009 the rate was 45% and the exemption amount was $3.5 million. On January 1, 2010 a "one year repeal" of the tax was effectuated by a temporary, one-year-only rate of 0%. On January 1, 2011 the estate tax is scheduled to a top rate of 35% and the exemption amount is scheduled to be $5 million, or $10 million for married couples.

Death Tax is a pernicious double tax.

Heritage Action Summary: This bill would repeal the estate and generation-skipping transfer taxes, as well as cut the top gift tax rate.

Heritage Foundation recommendation to vote YES: (4/16/2015): Collectively, these measures repeal the pernicious double tax known as the "death tax," and result in a tax cut of $269 billion over 10 years. The death tax hurts economic growth and therefore limits the ability of Americans to prosper. Repealing the death tax would generate an average of 18,000 jobs annually and increase the overall net worth of American households by $300 billion a year. The federal government should encourage, not punish, Americans who work and pay taxes their whole lives, save enough to support themselves through retirement, and retain the ability to fulfill the American Dream by passing along a better life to their children.

Secretary of Labor Robert Reich recommendation to vote YES: (robertreich.org 6/4/2015): At a time of historic economic inequality, it should be a no-brainer to raise a tax on inherited wealth for the very rich. Yet there's a move among some members of Congress to abolish it altogether. Today the estate tax reaches only the richest 2/10 of 1%, and applies only to dollars in excess of $10.86 million for married couples or $5.43 million for individuals. That means if a couple leaves to their heirs $10,860,001, they now pay the estate tax on $1. The current estate tax rate is 40%, so that would be 40 cents. Yet according to these members of Congress, that's still too much. Our democracy's Founding Fathers did not want a privileged aristocracy. Yet that's the direction we're going in. The tax on inherited wealth is one of the major bulwarks against it. That tax should be increased and strengthened.

Legislative outcome: Passed by the House 240-179-12; never came to vote in Senate.

Repeal marriage tax; cut middle class taxes.

[As part of the Contract with America, within 100 days we pledge to bring to the House Floor the following bill]:

The American Dream Restoration Act:
A $500-per-child tax credit, begin repeal of the marriage tax penalty, and creation of American Dream Savings Accounts to provide middle-class tax relief.